United states u"ict ..
Environmental Protection Ad-ninistrative L}w Judges
Agency Washington, DC 20460
v>EPA Administrative Law Judges
& EPA Administrators
Civil Penalty Decisions
(Under TSCA)
Volume: 2
January 1983 to December 1984
Compiled by:
U.S. Environmental Protection Agency
Office of the Hearing Clerk
401 M Street, S.W.
Washington, D.C. 20460
(.301) 382-4865
-------
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of
Bell & Howell Company
Respondent
-..o
M
) Docket Nos. TSCA-V-C-033?
) 034, 035 r-°
-j
1. Toxic Substances Control Act - PCBs - PCB penalty policy entitled
to weight in determining appropriate penalty.
2. Toxic Substances Control Act - PCBs - Manufacturer's nameplate on
transformers indicating a PCB dielectric fluid is not a substitute
for a PCB mark.
3. Toxic Substances Control Act - PCBs - Fact that a transformer has a
nameplate indicating it contains a PCB dielectric fluid is sufficient
to establish that transformer is a PCB transformer absent some showing
by Respondent that nameplate does not accurately state the kind of
dielectric fluid in the transformer.
4. Toxic Substances Control Act - PCBs - Asserted difficulty of finding
PCB rule in Federal Register rejected as a defense in mitigation of
penalty.
5. Toxic Substances Control Act - PCBs - Penalty of $7,500 assessed for
failure to mark PCB transformers. r
6. Toxic Substances Control Act - PCBs - Respondent's asset ledger and
operating and service manuals held not to, satisfy the PCB recordkeeping
requirements. ,
7. Toxic Substances Control Act - PCBs - That Respondent after inspection
in September 1980, started keeping records on its PCBs and preparing
the annual document is given little weight in assessing penalty when
. envidence shows that Respondent had done nothing with respect to keeping
records until it was inspected.
8. Toxic Substances Control Act - PCBs - Penalty of $5,250 assessed for
failure to prepare annual document for 1978 and 1979. Evidence
showed that transformers, which accounted for bulk of PCBs involved,
were all in active 'service.
-------
- 2 -
Appearances:
Craig A. Benedict arid Linda Szemprick, United States
Environmental Protection Agency, Region V, Chicago,
Illinois, for Complainant.
Louis M. Rundio, Sr., McDermott, Will & Emery, Chicago,
Illinois, for Respondent.
INITIAL DECISION
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
Section 16(a), 15 U.S.C.- 2615(a), for the assessment of civil penalties
for violations of a rule promulgated under Section 6(e) of the Act, 15
U.S.C. 2605(e), governing the manufacturing, processing, distribution,
I/
and use of polychlorinated biphenyls ("PCB rule"), 40 CFR, Part 761.
Three separate complaints were issued against Respondent Bell and Howell
w
Company. The first complaint (TSCA-V-C-033) alleged that Respondent
!_/ Section 16(a) of the Act, 15 U.S.C. 2615(a), provides in pertinent
part, as follows: -.
(a) Civil. (1) Any person who violates a provision of section 15
shall be liable to the United States for a civil penalty in an amount
not to exceed $25,000 for each such violation. Each day such a violation
continues shall, for purposes of this subjection, constitute a separate
violation of section 15.
Section 15 of the Act, 15 U.S.C. 2614, provides in pertinent part, that
"it shall be tin lawful for any person to (1) fail or refuse to comply
with . . . .(B) any requirement prescribed by section . . . 6 [15 U.S.C.
2605], or (c) any rule promulgated under section , .. - 6 or . . . (3) fail
or refuse to (a) establish or maintain records . . .as required by this
Act or a rule promulgated thereunder; ..."
-------
- 3 -
at its facility at 6500 North McCormick Road, Chicago, Illinois, had failed
to develop and maintain records required by the PCB rule. A penalty of
$1,000 was requested. The second complaint (TSCA-V-C-034) alleged that
Respondent at its facility at 2411 Howard Street, Evanston, Illinois, had
improperly disposed of PCBs, and had failed to develop and maintain records
required by.the PCB rule. A penalty of $10,000 was requested for the
violations of the recordkeeping requirements, and no penalty for the disposal
violation. The third complaint (TSCA-V-C-035) alleged that Respondent at its
facility at 7100 N. McCormick Road, Chicago, .111inois, had not dated a
container in which PCB contaminated material had been stored, had improperly
disposed of PCBs, had failed to properly mark its PCBs, and had failed to
develop and maintain the records required by the PCB rule. A penalty of
$10,000 was requested for the marking violation, and of $10,000 for the
recordkeeping violation. No penalty was requested for .the dating.or
disposal violations.
Respondent answered each of the complaints and denied the violations and
f
alleged that the imposition of any penalty in each case was unwarranted and
improper. A hearing on the charges in the complaints was requested.
The three cases were consolidated by order of the Chief Administative
*
Law Judge. The complaint's covering the violations alleged to.have been
found at the facilities at 2411 Howard Street, Evanston, Illinois, and
7100 N. McCormick Road, Chicago, Illinois, were subsequently amended to charge
that Respondent had either improperly disposed of PCBs at these facilities or in
. >*
the alternative had failed to use PCBs in a totally enclosed manner as
required by the PCB rule. No additional penalties were requested. Respondent
denied the amended charges.
-------
- 4 -
A hearing was held in Chicago, Illinois, on October 26, 1982.
Following the hearing, the parties submitted briefs on the legal and
factual issues. On consideration of the entire record and the briefs
submitted by the parties, a penalty of $12i?50 is assessed. All
proposed findings of fact inconsistent wit this decision are rejected. ..'
Findings of Fact
1. Respondent Bell and Howell Company, has facilities in the Chicago,
Illinois, area pertinent to this proceeding which are located at 6800
North McCprmick Road, Chicago, Illinois ("Lincolnwood South" facility),
7100 North McCormick Road, Chicago, Illinois ("Lincolnwood North" facility),
and 2411 Howard Street, Evanston, Illinois ("Hibband" facility) (admitted
in Respondent's answers).
2. On September 5, 1980, EPA inspectors visited Respondent's Lincolnwood
North facility for the purpose of inspecting Respondent's compliance with
the PCB regulations. -Transcript of proceedings ("Jr.") 80-81.Complainant's
Ex. 8 at 2.
3. On meeting with Respondent's representatives, the EPA inspectors were
informed generally that the Lincolnwood North facility had a large number
of transformers containing PCB dielectric fluid (Tr. 82).
4. In response to the EPA inspector's request to see PCB equipment at
the facility, Respondent's representatives directed the inspectors to four
transformers bearing nameplates disclosing that they contained either Askarel
*
or Pyranol, which are trade names for dielectric fluid having 500 parts per
. ' y
million ("ppm") or more :PCBs. None of these four transformers were marked
2/ By pretrial order dated January 5, 1982, I took official notice that
Askarel and Pyranol are trade names for transformer dielectric fluid having
500 parts per million (ppm) or more PCBs. Respondent has not shown these
facts to have been erroneously noticed.
-------
- 5 -
with the PCB mark which under the PCB rule must be affixed to all "PCB
transformers" (i.e. transformers which contain 500 ppm or more of PCBs),
3/
40 CFR 761.20(a) (redesignated as 761.40(a)). Tr. 86, 88-90; Complainant's
Ex. 8 at 2-3.
5. The inspectors were also shown a storage area in which was stored
a 55-gallon drum said to contain PCB contaminated rags, gloves, and
clean-up materials. This drum also was not marked with the PCB mark or
dated-as required by the PCB rule, 40 CFR 761.42(c)(8) (redesignated as
761.65(c)(8))f Tr. 86-87; Complainant's Ex 8 at 2-3.
6. In order to make their inspection, the EPA inspectors asked to see
Respondent's records on Respondent's PCB equipment for the three facilities
involved in this proceeding. Respondent was unable to produce any records
of its PCB items and had not prepared the annual document of its PCB
equipment which was required by 40 CFR 761.45 (redesignated as 761.80).
Tr. 84-85, 103; Complainant's Ex. 8 at 2.
7. Without the annual document, or records showing the number of PCB
items on hand, and the quantity of PCB they contained, the EPA inspectors
concluded that it was .not possible to complete the inspection (Tr. 85, 134;
Complainant's Ex.-.8 at 2). Accordingly, the EPA inspectors arranged to
return on September 10, 1980. The inspectors requested that at that time
they be furnished with a complete record of Respondent's PCB items for all
three facilities. Tr. 91, 103, 109; Complainant's Ex. 8 at 2.
3_/ The PCB rule was" recodified in 1982, without substantive changes being
made. See 47 Fed. Reg.' 19526 (May 6, 1982), as corrected by 47 Fed. Reg.
37360 (August 25, 1982). To make the references'to the rule consistent with
the complaint and briefs, the numbering prior to recodification is cited
with the redesignated number following in parenthesis. The definition of PCB
transformers as transformers containing 500 ppm PCBs or greater is found at
40 CFR 761.2(y) (redesignated as 761.3(y).
-------
- 6 -
8. On resuming their inspection of Respondent's Lincolnwood North
facility on September 10, 1980, the EPA inspectors were given a handwritten
inventory showing that Respondent had 32 transformers at that facility,
filled with a total of 5003 gallons or 23,295 kilograms (kgs.) of PCB
dielectric fluid (Askarel or Pyranol). This inventory bore the date 9-8-80.
.. .The EPA inspectors were also given a handwritten inventory showing that
Respondent had 5 transformers at its Hibband facility containing a total
of 1195 gallons, or 6192 kgs., of PCB dielectric fluid (either Askarel or
Pyranol). This inventory had also been prepared between September 5 and
September 10, 1980. Complainant's Exs. 3, 4, 8 (Inspectors Report No. 1
at 2-1-4, and Inspectors Report No. 2 at 2-1-4); Tr. 91-92, 107-8. No
inventory was given with respect to transformers located at Respondent's
Lincolnwood South facility, even though Respondent on September 10, 1980,
had one PCB transformer at that facility filled with 187 gallons, or 969 kgs.,
of Pyranol. Complainant's Ex. 8 at 4; Tr. 102.
9. Between September 5 and September 10, Respondent had marked the various
r
PCB items at its three facilities with the PCB mark. None of these items had
been properly marked prior to September 5, 1980. Tr. 161, 229-30.
10. Other than the handwritten inventories given to the EPA inspectors on
September 10, 1980, Respondent produced no other records, or any annual report
for its PCB items either on September 10, 1983, or on a subsequent inspection
of Respondent's Hibband facility on September 23, 1980.
11.. The first annual document prepared by Respondent, for its PCB items was
- >*
an.annual document covering 1980, and completed on June 6, 1981 (Complainant's
Ex. 5).
-------
- 7 -
Discussion and Conclusions and Penalty-
The proceedings concern the assessment of an appropriate penalty for
Respondent's marking and recordkeeping violations. As for the other
...violations charged in the complaint, those dealing with the improper disposal
of PCBs or in the alternative failure to use a PCB item in a manner other
-than totally enclosed, relate to the leakage of transformer fluid
which was observed during the inspections. By agreement of the parties, these
charges have been dropped by the EPA, with the EPA reserving the right to
introduce evidence regarding the leakage of transformer fluids to support
4/
the penalty it proposes for the marking and recordkeeping violations. The
claim that Respondent did not date a container of PCB contaminated materials
has not been dropped, but Complainant seeks no penalty for this violation,
arguing instead that it should also be considered in determining the _
appropriate penalty for the marking and recordkeeping"v-iolations.
. The .marking and-recordkeeping violations themselves are not disputed. .
What Respondent does"dispute is the penalty for these violations. Complainant
r
proposes a penalty of $10,000 for Respondent's failure to mark the trans-
formers at the Lincolnwood North facility, a penalty of $10,000 for its
failure to have an"annual document for 1978 and 1979 at this facility, a
.penalty of $10,000 for its failure -to have an annual document for 1978 and
1979 for its Hibband facility, and a penalty of $1,000 for its failure
to have an annual document for 1978 and 1979 for its Lincolnwood South
facility. The total proposed penalty comes to $31,000.
4/ Tr. 44. Accordingly,.Count I of the amended complaint in Case No.
TSCA-V-034, and Count I of the amended complaint in Case No. TSCA-V-035,
are dismissed with prejudice.
-------
- 8 -
m
Respondent contends that the violations were only technical at best,
were promptly remedied, and that a nominal penalty of $500 is warranted.
TSCA Section 16(a), 15 USC 2615(a)(l), provides that persons violating
TSCA or rules issued thereunder shall be liable for a civil penalty in an
amount not to exceed $25,000 for each such violation, and each day such
violation continues shall constitute a separate violation. Section 16(a)(2)
(B), 15 USC 2615(a)(2)(B), provides as follows with respect to assessing the
amount of the penalty:
(B) In determining the amount of a civil penalty, the Admin-
istrator shall take.into account the nature, circumstances, extent,
and gravity of the violation or violations and, with respect to the
violator, ability to pay, effect on ability to continue to do
business, any history of prior such violations, the degree of cul-
pability, and such other matters as justice may require.
The EPA's office of enforcement has issued guidelines for the assessment
of civil penalties under Section 16, supplemented by a PCB penalty policy, to
aid EPA enforcement personnel to assess appropriate penalties (hereafter
5/
collectively referred to as "PC Penalty Policy"). The purpose of having
such a general penalty system is stated to be "to assure that TSCA civil
penalties be assessed in a fair, uniform and consistent manner; that the
penalties are appropriate for the violation committed; that economic
incentives for violating TSCA are eliminated; and that persons will be deterred
6/
from committing TSCAviolations." These certainly are unexceptionable goals
/
in carrying out a civil penalty policy and seem to be consistent with Section
16. The rules of practice which govern these proceedings provide with respect
5/ ' See 45 Fed. Reg. 59770 - 59783 (September 10, 1980). The guidelines
start at 59770, with the PCB penalty policy supplementing these guidelines
beginning at 59776. '
6/ 45 Fed. Reg. at 59770.
-------
- 9 -
to my assessment of a penalty that I must consider these guidelines.
«
and further that if I assess a penalty different in amount from the penalty
proposed in the complaint (which should also be the penalty recommended
y
in the PCB penalty policy), I must give my reasons for doing so. Thus,
I am, in effect, required to give deference to the PCB penalty policy
but I am not bound to follow it and can assess a different penalty if I
have reason to regard the penalty recommended by the PCB penalty policy as
inappropriate. Such a requirement seems entirely in accordance with the
settled rule that agency policy statements interpreting a statute are
- 8/ -
entitled to be given'such weight as by their nature seems appropriate.
Accordingly, then, consideration will be given to determining whether
the $31,000 penalty recommended by Complainant conforms to the PCB penalty
policy and if it does, whether it is appropriate under the facts in this
case, and makes due allowance for those factors which the statute says must
be considered. .
7/ 40 CFR 22.27(b).
8/ See SRidmore v. Swift & Co., 323 U.S. 134, 140 (1944). Respondent
early in this proceeding requested that I withdraw arguing that the
requirement that I 'consider the guidelines will deprive Respondent of a
fair and impartial hearing, and that in a prehearing letter I had sent out
to accomplish some of-the purposes of a prehearing-conference, I had indicated
I would consider the guidelines by requesting Complainant to show how the
proposed penalty conforms to the PCB penalty policy. I denied the request
stating that my ability to render a fair and impartial judgement would not be
affected because I was free to assess a penalty different from that recommended
by the guidelines,and complaint, if I had reason to regard the recommended
penalty as inappropriate. See report of prehearing conference dated February 24,
1982. Respondent moved before the Administrator to disqualify me on similar
grounds, which motion is; still pending. See Tr. 44-45.
-------
- 10 -
The Marking Violation
In line with the allegations of the complaints in this proceeding,
Complainant seeks a penalty for the four unmarked transformers found at
the Lincolnwood North facility on the September 5th inspection. Under
the PCB penalty policy the statutory factors of the nature, extent and
circumstances of PCB violations are treated as bearing upon the gravity
of the violation. All four factors are incorporated in two components,
the extent of potential damage (measured by the quantity of PCBs involved),
and the probability of such damage, to determine an initial "gravity based"
penalty. This gravity based penalty can then be adjusted upwards or downwards
as merited by consideration of the other statutory factors, i.e., culpability,
history of violations, ability to pay, ability to continue in business, and
I/
such other matters as justice may require-. Complainant argues that $10,000
is the appropriate gravity based penalty under the PCB penalty policy for the
failure to mark the four transformers, given the quantity of PCBs involved
{over 1700 kgs.) and the probability of damages created by the absence of
JO/ r
a proper mark. Complainant would recognize no factors which would
9/ 45 Fed. Reg. at 5977.
IP/ The inventory furnished by Respondent showed that the four unmarked
transformers (a 500 KVA unit located in Building No. 1-Center, and three
167 KVA units in Building No. 1-South) contained a total, of 330 gallons of
Pyranol (Complainants Ex. 3; Complainant's Ex. 8 at 3).' Using a conversion
rate of 5.18 kgs. per gallon (Complainant's Ex. 8, Compliance Inspection
Report No. 1 at 2-1-4), the amount of PCBs totalled 1709.4 kgs. A violation
involving 1000 to 5000 kgs. of PCB is classified as "significant" in extent
of potential damage. Complainant places the violation in level 3 in
probability, of "damage (out of a scale ranging from 1 to 6, with 1 being the
highest), which according to the penalty schedule in the PCB penalty policy
would call for a penalty of $10,000. See 45 Fed." fce'g.. at 59777.
-------
- 11 -
justify mitigating- this penalty, and indeed argues that it is emminently
reasonable since that the record disclosed that Respondent had not properly
U/
marked any of the 38 PCB transformers at its Chicago area facilities.
The EPA mark contains a warning that PCBs are present, and must be
specially handled and'disposed of, and also provides a reporting point in
12/
the event_pf an accident or spill. There can be no doubt of the
importance of the PCB mark in insuring that PCBs will be properly handled
I!/
and disposed of so as not to injure health or the environment.
Respondent in attempting to minimize the violations argues that since
the transformers had nameplates indicating that they contained Pyranol or
Askarel, which are trade names for PCB dielectric fluid, persons would be
warned that the transformers did contain PCBs. A similar argument was made
ll/ Complainant would also point to Respondent's failure to mark the 48
capacitors at its Lincolnwood North facility as evidence of Respondent's
general disregard of the PCB rule's marking requirements. Brief at 4. The
evidence as to the status of these capacitors under the PCB rule, however,
is inconclusive. The PCB rule requires only that large capacitors be marked.
40 CFR 761.20 (redesignated as 761.40); Complainant's Ex. 7 at 23.' A large
capacitor is defined as one containing 1.36 kgs. (3 IDS.) or more of dielectric
fluid. 40 CFR 761.2(d) (redesignated as 761.3(d)). Respondent's capacitors
each appeared to contain about one-fourth gallon of fluid (Complainant's Ex. 5).
By Respondent's calculations, 6410 gallons of PCB oil equalled 36,344 kgs.
(Complainant's Ex. 5). Under this ratio, one gallon would be equal to 5.669
kgs., and one-fourth gallon to 1.417 kgs., making Respondent's capacitors
large capacitors. Respondent, however, points to the fact that'the EPA
inspector in his report used a ratio of 5.18 kgs. per gallon (see Complainant's
Ex. 8, Inspection Report No. 1 at 2-1-4), according to which the capacitors
would contain only 1.295 kgs. of fluid, and would not have to'be marked.
Because of this inconsistency in the evidence, Respondent's capacitors are
not considered as being covered by the marking requirements.
J_2/ .See 40 CFR 761.44 (redesignated as 761.45).
13/ The importance of the marking of PCBs in the"regulatory scheme is shown
by the. fact that markings of PCBs is specifically required by the statute.
See TSCA, Section 6 (e)(l)(B).
-------
- 12 - .
in the case of Briqqs & Stratton Corp., TSCA Appeal No. 81-1, (February 4,
1981), and rejected by the Judicial Officer for the obvious reason'that
the manufacturer's nameplate does not like the EPA-approved mark contain
instructions about the proper disposal of PCBs. Briggs & Stratton Corp.,
supra at 29. Nor does the nameplate like the EPA-approved mark contain
a clear and unmistakable warning that PCBs are a toxic environmental con-
taminant requiring special handling so that all persons who do come into
^, ... . ....
contact with leaks or spills from the transformers will not only know that
PCBs are present but they will act to avoid any injury to themselves or to
!!/
the environment. Respondent may possibly know that PCBs must be care-
fully handled, but if it did, it does not appear to have disseminated
15/
information about the careful handling of PCBs to its employees.
Finally, while, as Respondent argues, Respondent's employees who participated
in the inspection knew that its transformers contained PCBs, it does not
follow from this that all employees who would be exposed to any leaked or
»
spilled fluid from the transformers would know without the presence of the
PCB mark that the fluid is a PCB fluid.- Consequently, Respondent's claim
that the presence of the manufacturer's label makes the violation5" less
serious is found to be without merit.
Respondent further argues that no harm resulted from its failure to
affix the proper label, because Respondent in any event did observe the
special handling and disposal requirements. Respondent points to its
having placed PCB cleanup materials in a steel drum and storing' the drum
in a proper .storage area. This shows some attention to the PCB rule, but
W Workers exposed to-'PCBs must avoid skin contact with and ingestion of
PCBs by wearing protective clothing and by washing their hands and removing
contaminated clothing. See the preamble to the EPA's proposed PCB disposal
and marking rule, 42 Fed. Reg. 26564, 26566 (May 24, 1977), a document of
which I may take official notice, 44 U.S.C. 1507. See also Complainant's
Ex. 7 at 36-37. '
Tr. 161, 172-73.
-------
- 13 -
does not address the risk created by the absence of an EPA-approved mark
that employees who did encounter any PCBs, would not be aware that they
were being exposed to a chemical which required special handling. Nor is
it mere speculation to find that there was such a risk. That transformers
do leak is demonstrated by the fact that the EPA inspectors found several
16/
leaking transformers during their inspection. Also, the EPA notes in the
preamble to its PCB rule that routine servicing of transformers may result
HI
in some exposure.
The PCB penalty policy bases the size of the penalty on the probability
of harm inherent in "the violation. Whether harm actually resulted is not
W
considered as a factor. This approach seems emminently reasonable. To
reduce a penalty because no harm occurred would be tantamount to rewarding
a violator because of what may well be simply its good fortune in escaping
the consequences of its violations, and such a policy would certainly not
encourage compliance with the rule. Hence, the penalty will be assessed
according to the probability of damage as indicated by the record in this
proceeding.
The absence of the EPA approved mark does create the potential that
spills from Respondent's transformers, which could "involve a large quantity of
1_6/ Tr. 96, 109-111, Complainant's Ex. 8 at 3, and PCB .compliance
Inspection Report No. 1 at 2-1-4.
IT/ . See 44 Fed. Reg. 31531.
J_8/ PCB penalty policy, 45 Fed. Reg. at 59777. ' See also TSCA Civil Penalty
Guidelines of which the penalty policy is a part,""45 Fed. Reg. at 59772.
-------
- 14 -
PCBs, would not be properly handled or cleaned up, and that transformers
containing a large quantity of PCBs would not be properly disposed of.
The greatest risk of exposure would appear to be to small quantities "of
19/
PCBs leaking from the transformers. Respondent, also, was not
completely oblivious to the PCB rule requirements. Since it had properly
stored some PCB cleanup materials, the possibility that it would use the
required care in cleaning up spills or leaks or in disposing of its
transformers, cannot be entirely dismissed.
On the other hand, Respondent's conduct has not been such as would
justify the assumption that there was only a minimal risk of harm. The
record in this case shows that the absence of proper marks on the four
transformers named in the complaint resulted from Respondent's complete
disregard of the marking requirements, since none of Respondent's 38
207
transformers in its three facilities had the EPA-approved mark.
Respondent claims that it had affixed labels to the other transformers but
discovered that the labels were incorrect. Respondent has given no details
about the format of these labels which would show at least some compliance
with the PCB rule, and Mr. Horn's explanation for not having the correct
labels is unconvincing as evidence of a good faith effort to comply with
19/ Complainant characterizes the leaks at the Hibband facility as "moderate."
Brief at 24. The inspection report, however, referred to the leakage as
being "very minor." Complainant's Ex. 8, Compliance Inspection Report No.
3 at 2-1-4.
20/ See Finding of Fact No. 9, supra.
-------
- 15 -
the PCB rule. Also bearing upon Respondent's general lack of compliance
with the PCB rule is its failure to maintain an annual document for. its PCBs,
a matter which is discussed further below, and its failure to comply with the
EPA's requirements that the containers in which PCBs are stored must be dated
.. 22J . ....... -
and marked. In view of such evidence, the fact that Respondent did have
/
some PCB cleanup material properly stored cannot be accepted as proof that
Respondent always or even generally observed the special handling and disposal
requirements, contrary to what Respondent appears to'contend. Rather, the
evidence is that Respondent's compliance with the PCB rule was haphazard at
best. . - *
*
The PCB marking requirements for Respondent's transformers have been
in effect since January 1, 1979. Thus, for well over one year Respondent
left its transformers unmarked, creating for the reasons already discussed,
237 .
a real risk of injury to persons if not to the environment. In appraising
the extent of the risk, account may also be taken of the undisputed evidence
that it was not four transformers which were unmarked, but 38 transformers,
containing a total of 6385 gallons of PCB, equal to over 33,000 kgs.
21/ Mr. Horn's explanation was that he did not personally take care of
the labeling but delegated it-to the maintenance-department. He also
seems to blame the mistake on the lack of clarity of the PCB rule. Tr.
163, 190-91, 192-93, 197-200. The rule, however, could not be clearer
providing as it does an actual facsimile of the mark. 40 CFR 761.44,
Credesignated as 761.45). Consequently, Respondent's failure to apply the
proper mark, to say the least, shows a very careless or indifferent attitude
toward meeting the PCB rule requirements.
22/ See Findings of Fact No. 5, supra.
*' . ^ ..
23/ The only change in Respondent's inventory of its transformers since
December 31, 1977, has been the possible addition of one transformer. Tr. 238.
-------
- 16 -
Respondent states, nevertheless, that it was uncertain whether its
transformers were PCB transformers (i.e., contained PCB at 500 ppm or
greater). Respondent's uncertainty over its obligation to mark its
transformers is unpersuasive as evidence justifying a minimal penalty, for
the following reasons:
First, it is not disputed that Askarel or Pyranol are trade names for
24/
dielectric fluids containing 500 ppm PCBs or greater. The fact that a
transformer has a nameplate indicating that it contains a PCB dielectric fluid
is sufficient to establish that the transformer is a PCB transformer, absent
some showing that the nameplate does not accurately state the kind of
25/
dielectric fluid in the transformer. . Respondent, however, never attempted
to show that the PCB content of its transformers labeled as containing Askarel
or Pyranol had been changed by the addition of non-PCB mineral oil. Instead,
26/
it expressly agreed that it would not present such evidence. Accordingly,
it is found that Respondent had no reasonable basis for believing that its
transformers contained less than 500 ppm PCBs.
247 These facts were officially noticed. See Order granting official notice
in part dated January 5, 1982. Respondent has never questioned the facts
noticed. In fact,. PCB dielectric fluids are likely to contain PCBs well above
the 500 ppm level, as Respondent itself recognized. See Respondent's
Procedure and Information Bulletin, Complainant's Ex. 6 at 2.
25/ The question of the probative value to be accorded the transformer's
nameplate was first considered by me in this proceeding in my order denying
Complainant's motion for an accellerated decision, issued on January 25, 1982.
I then held that the presence of a PCB nameplate is sufficiently persuasive
to make a prima facie case that the transformer is a PCB transformer, so as
to put on Respondent the burden of producing credible evidence to show the
contrary. . I further said that it was not unreasonable to place such a
burden on Respondent sihce it would be the one naturally possessed of relevant
evidence as to changes in the transformer's dielectric fluid. See order
denying motion for accellerated decision at 4-5. ~ See also Commonwealth of
Puerto Rico v. Federal Maritime Commission, 468 F. 2d 872, 881 (D.C. Cir. 1972)
'26/ See agreement of counsel, Tr. 43-44.
-------
- 17 -
Second, any doubts Respondent ir.ay have had about whether its -transformers
contained PCBs of-500 ppm or greater could have been easily resolved so as
not to violate the PCB rule. Respondent could have tested the dielectric
' 27/
fluid to determine its PCB content, but never appears to have done so.
In lieu of testing, Respondent could have simply assumed that its transformers
were PCB transformers1 and marked them. In fact this seems to be precisely
x-
what Resjjp.ndent did following the EPA's inspection.
Respondent's representatives in explaining why the transformers had not
been properly marked before the inspection testified that they did not know
about the PCB rule's requirements prior to the inspection and did not
... 28/
understand the requirements. Respondent in its brief also contends that
the EPA is at fault for Respondent's lack of detailed knowledge about the
297
PCB rule. Publication in the Federal Register, however, was sufficient
to put Respondent on notice of the PCB rule's requirements. Respondent is
as accountable for knowing about the rules and regulations- in the Federal
Register which apply to its business, as it is for knowing about the laws
ipy . -
which do so. At first glance, Respondent's complaint about the, difficulty
27/ See. Tr. 183 *'
28/. See Tr. 170, 196-98 (Horn); 206-07 (Weigand).
297 Respondent's brief at 15. , .
307 See-44 U.S.C. 1507. In Federal Crop Insurance Corp. v. Merrill, 332 U.S.
380, 384-85 (1947), the Supreme Court stated, "(JJust as everyone is charged
with knowledge of the United States Statutes at Large, Congress has provided
that the appearance of rules and regulations in the Federal Register gives
legal notice of their contents."
-------
- 18 -
of finding the PCB regulations in the massive amount of infornation in
the Federal-Register, may have some superficial appeal as demonstrating
Respondent's lack of culpability. It is entirely unpersuasive, however,
under the circumstances of this case. Respondent is a large corporation
.
-presumably experienced in knowing how to keep up with the numerous laws
siy
it is subject to. ; Here, Respondent admittedly knew that its transformers
contained some PCBs, which should have alerted it to the relevancy of the
PCB regulations, and there were four prominent notices published by the
32/
EPA relating to the regulation of PCBs. Indeed, Mr. Weigand, Respondent's
vice president responsible for advising on health and safety regulations, was
himself unsure as to how much Respondent's« personnel actually knew about the
33/
requirements of the PCB rule. In sum, Respondent's argument that
it is less culpable than it would be if the EPA had specifically informed it
of the PCB. rule's, requirements, must be rejected. Not only would acceptance
.->°>. ^ -
of such a claim be in derogation of the law which specifically provides that
publication of-a document in the Federal Register-is sufficient notice of the
317 See Tr. 224
32/ See proposed PCB marking and disposal rule, 42 Fed. Reg. 26564
"[May 23, 1977);-final PCB marking and disposal rule, 43 Fed. Reg. 7151,
(February 17, 1978); proposed final PCB ban rule, 43 Fed. Reg. 24802
(June 7, 1978); final PCB ban rule, 44 Fed. Reg. 31514 (May 31, 1979).
/
337 See Tr..229. The testimony of Mr. Horn, Respondent's electrician in
charge of maintaining- the transformers at the Lincolnwood North and Hibband
facilities, as to his knowledge about the PCB rule prior to the September 5th
inspection is so contradictory as to provide no clue whatever to what he
actually knew.- See Tr. 191-197.
-------
- 19 -
contents .pf the document to a person subject to or affected by it,.but
the claim appears to be more a convenient excuse than the real reason-
for Respondent's non-compliance with the PCB rule.
As to Respondent's dificulty in understanding the marking requirements,
so far as it did know about the PCB rule, although on their face the
requirements seem clear enough, Respondent could have turned for clarification
34/
to the preamble of the rule in which the EPA explained its regulations.
Respondent could also have asked the EPA for advice instead of sitting back
and waiting for the EPA to advise it.
Accordingly, taking account of the nature, circumstances, extent and
gravity of the violation, the degree of culpability, and such other matters
as justice would require be considered in determining the penalty, I find
that the appropriate penalty to be assessed for the marking violation under
35/
the circumstances of this case is $7,500. A penalty in this amount is
merited not only as being appropriate to the violation "committed but also to
serve as a deterrent against further violations.
347 The final ban rule contained a detailed explanation of the EPA's marking
requirements, because of the change in the rule brought about by regulating
transformers that contained 50 to 500 ppm PCBs, as well as transformers that
contained 500 ppm PCBs or greater. See 44 Fed. Reg. 31517-518, 31521. The
preamble to a rule is an authoritative aid in construing a regulation. See"
Wiggins Bros., Inc. v. Dept. of Energy, 677 F. 2d 77, 88 (Temp. Emer. Ct.
AppI, 1982).'
35/ Respondent has not raised any defense putting in issue either its
ability to pay a penalty or the effect a penalty would have on its ability
to continue in business.
-------
- 20 -
The Record keep inq and Annual Document..Violation
I ^^"~ ' J . M _«_ -- «-»^^^» _
1
The PCB rule requires Respondent, beginning July 2, 1978, to develop
36/
and maintain records in the disposition of PCBs and PCB items. These
»
categories would include Respondent's PCB transformers, PCB capacitors
37/
and its stored containers of PCB contaminated material. The records.are
-to .form the basis of an annual document prepared for each facility by July 1,
covering the previous calendar year. The records and the annual documents
are to be maintained for at least five years after the facility ceases using
or storing PCBs and PCB items. The annual document to be prepared from the
records is to contain information about the quantities of PCBs and PCB items
in service, removed from service, placed into storage for disposal, or placed
38/
into transport for disposal and certain other prescribed information.
The recordkeeping and annual document requirements were part of the
PCB marking and disposal rule issued in February 1978, -which rule was later
incorporated in the final ban rule. In-its preamble to the marking and
disposal rule, the EPA said that the recordkeeping and annual document
36/ 40 CFR. 761.45 (redesignated 761.80).
37/ See definitions of PCBs and PCB Items, 40 CFR 761.2(s), (X) (redesignated
as 40 CFR 761.3(s), (X),).. Respondent contends that its capacitors do not have
to be referred to .in_the annual document because it has not been shown that they --
are PCB large capacitors. Brief at 14. Whether a capacitor is a large or small
capacitor would be relevant only to the question of whether Respondent must
maintain records and prepare an annual document. Here, the maintenance of records
.and preparation of an annual document for each.facility is required by the fact
that Respondent has one or more transformers at each facility. The annual
document which must be prepared, however, pertains to all "PCBs and PCB Items."
40 CFR 761.45-(redesignated 40 CFR 761.80). Capacitors which contain PCBs are
"PCB Items" within the meaning of the rule. 40 CFR 761.2(x).
38/ See 40 CFR 761.45.
-------
- 21 -
requirements, "will assist the Agency in determining compliance with the
»
regulation and should also assist ov/ners and operators in maintaining
39/ .
effective inventory control and insuring timely disposal." In con-
struing the requirement, the EPA has used similar language. Thus, in
National Railroad Passenger Corp. (AMTRAK),. TSCA Appeal Wo. 82rl at 9. .
(April 27, 1982), it was stated that , "[t]he records required by the
regulation are to be used by the owner as a basis for preparing an annual .
report, for insuring appropriate control and handling of PCBs and to assist
the Agency in enforcement of the regulations."
It is not disputed that Respondent had prepared no annual report for
1978 and 1979. Respondent contends, however, that its asset ledger listing
its assets for financial reporting purposes, and the operating and maintenance
manuals which came with the transformers contained the information needed
to prepare an annual document and, therefore, met the recordkeeping requirements
40/ / .
of the PCB rule. Respondent contends, then, that its failure to have an
annual report, on .hand on.September 5, ..1980, was only a. de minimi's violation, .
easily remedied by having available at the September 10th inspection a doc-
r
ument containing essentially all the information needed for an annual document.
There are several serious flaws in this argument.
!39/ 42 Fed, Reg..265.70 (May 24," 1977).... The. preamble of .a regulation can.
properly be consulted in determining the meaning of the regulation.
Wiggins Bros.,'Inc. v. Dept. of Energy, 677 F. 2d 77, 88 (Temp. Emer. Ct.
App. 1982).While in this case the statement was in the proposed rule,
the final rule referred to the proposed rule, and discussed.changes made
in the final rule as a result of comments received on the proposed rule.
Consequently, the preamble to the proposed rule is clearly a part of the
legislative history of the rule, and recourse to it for purposes of con-
struing the rule is proper. Since the preamble to the proposed rule was
published in the Federal Register, I may also take official notice of its
contents. 44 U.S.C. 1507.
40/ The asset ledger and operating and maintenance manuals are described at
219-220. Mr. Weigand admitted that these records were not kept for the
specific purpose of.complying with the PCB rules. Tr. 222.
-------
- 22 -
»
In the first place, it has not been shown that the records would
contain all the information required by the annual document for PCB* items
removed from service or stored for-disposal. Respondent contends that it had
accurately and completely kept track of the cleanup material in storage, but,
4V . '
this is without support in the record. In fact, the annual document for the
t
Lincolnwood North facility that Respondent ultimately produced for..1980, did_
not show~either the date that PCBs in the 55-gallon drum were put into storage
-42/
for disposal or the weight in kilograms of these PCBs.
Second, it is unclear whether the asset ledger or service and operating
manuals could even "form the basis of an annual document" for Respondent's
'«/
transformers. If they could, presumably, Respondent would have been able
to furnish annual documents for 1978 and 1979. Respondent, however, instead
of producing an annual document for its PCB transformers -for 1978 and 1979,
had Mr. Weigand testify generally to the fact that in this two-year period
44/
there was an expansion program and one transformer could have been added.
No records were produced to support this testimony, even though according to
41/ Respondent's brief at 2, 6. Respondent cites the inspection report for
the claim that the date the cleanup materials were placed in storage was
available in Respondent's records. The report, however, appears to be based
on what the EPA inspector was told and not.on an actual inspection of any
records. Tr. 84, 93.
42/ See Complainant's Ex. 5.
43_/ See 40 CFR 761.45(a) (redesignated as 761.80(a)).
447 Tr. 238-39. -
-------
- 23 -
Respondent the records were readily available and enabled Respondent to
45/
accurately and completely keep track of its PCB items.
Finally, it is to be noted that in producing the handwritten inventories
requested by the EPA inspectors and ostensibly made up from Respondent's records;
.
Respondent omitted the.PCB transformer at its Lincolnwood South facility,
which also raises doubts about how effective Respondent's records were in en-
abling Respondent to keep track of its transformers.
In sum, Respondent's argument that the asset ledgers and maintenance
and operating manuals satisfy the recordkeeping requirements of the PCB
rule is found to be unsupported by the record.
Respondent's failure to prepare annual documents for 1978 and 1979,
or have adequate records for those years cannot be dismissed or glossed over
as unimportant. The annual documents show the changes from year to year,
and the maintenance of proper records provide a means for both Respondent
and the EPA to verify that all changes in PCBs occurring in the period
intervening between two annual documents are reflected in the current annual
document._ In this case, however, the EPA is simply being asked to rely on
Respondent's undocumented recollection of the status and disposition of its
PCB transformers and other PCBs for the period prior to 1980, a situation
which the PCB rule was clearly intended to prevent.
45/ Respondent's brief at 6.. Respondent cites Mr. Weigand's testimony to
support its claim that Respondent had adequate records. The testimony refers
to data sent by Respondent to its counsel over a two year period which were
used in compiling the 1980 annual document. Tr. 213-15, 218-229. None of
this data was provided, however.
-------
- 24 -
Further, without an annual document showing the number of PC&
transformers at each facility and their PCB contents, the EPA inspectors
467
felt that they could not make a complete inspection on September 5.
Respondent contends that the EPA inspectors were asking for an "inventory"
IT/
of Respondent's PCB equipment when no such record was required by the rule.
The argument, however, does not place in proper perspective the situation
in whichthe EPA inspectors found themselves on their September 5 inspection.
At a minimum, the EPA inspectors had the right to expect that they would be
shown the latest annual document (for 1979) and the records that.were used to
compile it. Since Respondent did not produce any of this information, the
inspectors reasonably requested that an inventory be prepared to assist them
48/
when they resumed their inspection.
Respondent to show its good faith put in evidence that it did prepare an
annual report by 1980 on time and, has prepared an annual report for 1981, and
also has prepared the quarterly reports required by the Interim Measures
497 ......
Program. Complainant contends .that these reports are incomplete or
were not prepared on time. It is not necessary to decide whether? Complainant
46/ See Complainant's Ex. 8 at 2. Respondent contends that the inspection
on September 5 was not completed because a special corporate meeting for
facility managers had been called at 2:30 P.M... ..Nevertheless, .the inspection
report as supplemented by Mr. Mortenson's testimony (Tr. 84-85), clearly
indicates that the EPA inspectors considered themselves unable to complete
their inspection without seeing some record of the total number of transformers
at Respondent's facilities.
47/ Respondent's brief at 11-12.
. »
48/. See Tr. 84-85, 10~9, 125; Complainant's Ex. 8 at 2.
49/ See 46 Fed. Reg. 16095 (March 10, 1981). "*" -
-------
- 25 -
is correcf because the evidence offered by Respondent to show its good faith
after the inspection must be evaluated in light of the fact that Respondent
did nothing in the way of keeping records until it was inspected.
Complainant's proposed penalty of $21,000 for the recordkeeping
violations is based on an estimate of probable damage which I believe is
spy
not justified under the facts of this case. Here the transformers, .-
- *~ ^.^
which accounted for the bu-lk of the PCBs involved, were all in active
service. The recordkeeping requirement appears to be directed mainly
toward insuring that PCBs will be disposed of in accordance with the
regulatory requirements,'so that the potential for harm is likely to be
greatest in situations where PCBs are being removed from service, or stored.
and disposed of without the maintenance of proper records. Here the
gravity of the offense lies not so much in the potential for harm as in
Respondent's neglect to carry out its responsibilities under the PCB rule.
This does not mean that only a minimal penalty is justified under the
circumstances of this case. As already noted, the recordkeeping requirements
have the dual function of assisting both the EPA in enforcing the? PCB rule
5V
and Respondent in complying with the rule. Respondent may have felt
that the records and annual document were not important to it, but the
importance of these records to EPA's inspectors has been clearly shown
50_/ Complainant based on the quantities of PCBs involved at each facility
would classify the recordkeeping violations at the Lincolnwood North and
Hibband facility as major violations and the violation at the Lincolnwood
South facility BS a minor violation. The probability of damage is placed
at level 4. -
5iy Supra at 21.
-------
- 26 -
in this record. The penalty, accordingly, must be large enough to insure
that Respondent will carefully adhere to the recordkeeping requirements
from now on. I find, then, taking into account the pertinent statutory
factors, that the appropriate penalty to be assessed for the recordkeeping
52/
violation is $5,250.
Accordingly it is, concluded that a total penalty of $12,750 should-
be assessed for the violations found in this case.
53/
ORDER
Pursuant to Section 16{a) of the Toxic Substances Control Act (15 U.S.C,
2615(a)), a civil penalty of $12,750 is hereby assessed against Respondent
Bell and Howell Company, for the violations of the Act found herein.
Payment of the full amount of the civil penalty assessed shall be made
within sixty (60) days of the service of the final order upon Respondent
by forwarding to the" Regional Hearing Clerk a cashier's check or certified
. »
check payable to the United States of America.
^
Gerald Harwood
Administrative Law Judge
February 3, 1983
52/ This translates into $2,500 for each of the violations at the
Lincolnwood North and Hibband facilities and $250 for the Lincolnwood South
facility. --. .
52/ Unless an appeal is taken pursuant to section 22.30 of the rules of
practice or the Administrator elects to review this decision on his/her
own motion, the Initial Decision shall become the final order of the
Administrator (See 40 CFR 22.27(c)).
-------
22
-------
UNITED STATES ENVIROl^ffiNTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of )
)
N.O.C., Inc., ) Docket No. II-TSCA-PCB-81-0105
T/A Noble Oil Company, )
)
Respondent )
1. Toxic Substances Control Act - Rules of Practice - Motions to
Reopen the Hearing - Where primary basis of notion to reopen
the hearing was contention that scientific data on variability
(standard deviation) of analyses of PCBs in waste oil matrices
first made available subsequent to the conclusion of the hearing
cast doubt on the conclusion in the -initial decision that level
of PCBs in Respondent's oil tank was in excess of regulatory limit
of 50 ppm and the only evidence offered in support of the motion
was data on inter laboratory variability (the EPA laboratory which
made the analysis in question not having participated in the
studies which generated the interlaboratory variability data), and
under all the circumstances it did not appear likely that such
data would change the result, the motion would be denied. Where
validity and accuracy of analysis showing PCB concentration in
waste oil tank to be in excess of 50 ppm was in issue, matters
bearing on whether such analysis was properly conducted which
could have been more thoroughly explored at the hearing were
cumulative and could not support a motion to reopen the hearing.
2. Toxic Substances Control Act - Rules of Practice - Motions to
Reopen the Hearing - Where basis of alternative motion to reopen
the hearing was contention that Respondent refrained from offering
evidence concerning propriety of proposed penalty because of belief
that penalty would be considered, if at all, only at a second hearing
after liability was first determined and no evidence was offered to
show that asserted belief was reasonable, alternative motion would
be denied.
-------
Appearances for Respondent:
Alan G. Kelley, Esq.
Greenberg, Kelley and Prior
Attorneys at Law
Trenton, New Jersey
Appearances for Complainant:
Gregory T. Halbert, Esq.
Office of Regional Counsel c-
U.S. Environmental Protection Agency °^
Region II :z
New York, New York ^
Decision Denying Motion to -o
Reopen the Hearing co
*
CD
An initial decision, assessing a penalty against Respondent of
$40,000 for violations of Section 15 of the Toxic Substances Control Act
(15 U.S.C. 2614), was issued on December 3, 1982. The decision was
served on Respondent by letter from the Regional Hearing Clerk, dated
December 13, 1982, and received by Respondent on December 16, 1982. On
January 4, 1983, within the 20-day period for filing a motion to reopen
the hearing allowed by the Rules of Practice (40 CFR 22.28), counsel
moved for an extension of time in which to file such a motion. This
motion was granted and under date of January 19, 1983, Respondent filed
a motion to reopen the hiring. After requesting and receiving two
extensions of time in which to respond, counsel for Complainant's
opposition to the motion was received on February 25, 1983. Respondent
filed a reply brief under date of March 28, 1983, Complainant was permitted
to file a response on April 11, 1983, and Respondent was permitted to and
did file a final reply affidavit on May 3, 1983.
-------
3
The basic thrust of the motion is that evidence and scientific data
bearing on the analytical variability (standard deviation) of analyses
of PCBs in waste oil matrices, first made available subsequent to the
conclusion of the hearing (February 11, 1982), would preclude a finding
that the PCB concentration determined here (76 ppm) was in excess of the
then regulatory limit of 50 ppm. In support of the motion, Respondent
has attached the affidavit of Mr. William J. Ziegler, a chemist and
laboratory Manager for Stablex-Reutter, Inc., a consulting and testing
firm. Mr. Ziegler appeared as an expert witness for Respondent at the
hearing and testified, inter alia, that he was then engaged in a research
project involving analysis of PCBs in waste oils and that he would be
presenting a paper on that subject at the Pittsburgh Conference and
Exposition on Analytical Chemistry and Applied Spectroscopy to be held
the following month, March of 1982. Assertions in Mr. Ziegler's affidavit
are based, in part, on this paper attached thereto.
Alternatively, Respondent contends that the hearing should be
reopened to allow evidence on the issue of the civil penalty because it
believed that such evidence would be offered, if at all, only at a record
hearing after liability had first been determined.
The substance of Mr. Ziegler's affidavit may be sunmarized as
stating that at the time the 50 ppm regulatory limit was established
there was no published and well recognized method for testing for PCBs
in waste oils at that concentration, that high concentrations of PCBs in
transformer fluids could be measured with a high degree of confidence
[in the accuracy of the test], but that when waste oils, which present a
-------
4
considerably more complex matrix than transformer fluids, are analyzed
at the [50] ppm level, the precision and accuracy of the method can
suffer significantly. It is further asserted that the key to a laboratory
quality assurance program is the analysis of spiked and replicate samples
and the daily monitoring of accuracy and precision control charts,
outside of which the analysis is considered out of control, that the
measure of variability of data obtained at the 95 percent confidence
level is two standard deviations, that the relation of the mean result
obtained to the upper confidence level (UCL) and the threshold value (50
ppm) must be considered to determine if further analysis is warranted
and that if the mean result exceeds the threshold value and also the
UCL, then there is a considerable probability that the waste is not a
hazardous waste. In such a case, further confirmatory and replicate
determinations are warranted to substantiate a result in excess of the
threshold value. According to Mr. Ziegler, the EPA tests on Sample
No. 57970, which determined a PCB concentration of 76 ppm, from Noble
Oil Company present exactly this type of situation.
Mr. Ziegler's affidavit states that at the 95 percent confidence
V
limit (level) the inter laboratory variability for Stablex-Reutter for
50 ppm PCB in waste oil is +34 ppm, which implies that only a result- in
I/ Although Mr. Ziegler states that it is the responsibility of
every laboratory to monitor the precision and accuracy of its methods to
define the degree and accuracy of intralaboratory variability, curiously
it is inter laboratory variability that is emphasized here.
-------
5
excess of 84 ppm can be considered a violation of the 50 ppm limit in
the absence of numerous data on spiked and replicate samples, demonstrating
a lower variability. If a laboratory does not have a program to monitor
intralaboratory variability, or cannot produce data on a method for a
given matrix, then data on interlaboratory variability must be considered,
even though the precision and accuracy of intralaboratory data should be
higher. In this regard, Mr. Ziegler cites tvro recent studies, "Comparison
of Three Extraction Techniques for the Determination of Polychlorinated
Biphenyls," Exh II, authored by himself and three others, presented at
the mentioned Pittsburgh Conference, and "Data from Round Robin Study on
PCBs in Waste Oil," (1982), Exh III, by the National Bureau of Standards.
The former study shows that at the 50 ppm enforcement limit, using a 95
percent confidence level (2 x standard deviation) an interlaboratory
variability of +67.7 percent exists using a modified EPA Method 608 and
Environmental Monitoring and Support laboratory (EMSL, Cincinnati, Ohio)
Methods. This result is asserted to mean that a PCB test result must be
greater than 84 ppm before it can be considered a statistically valid
violation of the 50 ppm enforcement limit. Laboratories using the Hall
Electrolytic Conductivity Detector and the EMSL procedure had a much
lower variability than labs using an electron capture (EC) detector.
The National Bureau of Standards study involved 19 laboratories and also
involved PCBs in waste oil matrices. For samples close to the 50 ppm
enforcement limit (41.0, 60.9, 41.0, 60.9, 41.0, 48.0 and 40.0 ppm) a
mean standard ^deviation of 27.4 ppm was obtained. This implies that at
the 95 percent confidence level a variability of +54.8 ppm exists at the
-------
6
50 ppm PCB enforcement limit. Using this data, a sample would have to
exceed 105 ppm before it could be considered to be statistically in
violation of the 50 ppm limit.
Applying these data to the EPA test on Sample No. 57970 from Noble
Oil Company, Mr. Ziegler concludes that the sample result of 76 ppm is
neither statistically nor analytically in definitive violation of the 50
ppm PCB limit. He points out that an EC detector was used for the
analysis, that EMSL procedure specifies a Hall over an EC detector
because of false positive or negative interferences that may result from
nonhalogenated materials in waste oils, that it was possible false positive
responses were observed in the EPA analysis and to demonstrate that this
was not the case, an internal standard and alternate column chromatography
should have been performed. He further points out that no internal
standard was used by EPA in its analysis so that no positive identification
of chromatographic peaks as PCBs can be made, that EPA (EMSL) procedure
specifies that at least 10 percent duplicate and 10 percent spiked
determinations be performed to ensure that the method is in control and
that no such data was provided by EPA to support the reported result on
Sample 57970. Because no control charts have been provided to define
the intralaboratory variability of the EPA Edison, New Jersey laboratory
involved in the test of Sample 57970, Mr. Ziegler asserts that a statement
cannot be made as to the variability of the analysis and data on inter-
laboratory variability and precision must be used. According to Mr. Ziegler,
the result of-76 ppm is not statistically in violation of the 50 ppm PCB
limit at the 95 percent confidence level using interlaboratory data and
EPA requirements in such a situation specify that additional sampling
-------
7
and analysis is necessary because the UCL is greater than the threshold
value.
Opposing the motion, counsel for Complainant has submitted the
affidavit of Mr. George M. Karras, the chemist who conducted the test on
Sample No. 57970. In accordance with his testimony at the hearing and
as found in the initial decision, Mr. Karras used a silica gel cleanup
procedure to prepare the sample for the test. This procedure is authorized
by EPA (Exh 8) and its purpose is to remove materials which might interfere
with the analysis. The test was conducted using Method 608 (44 FR No. 233,
December 3, 1979, at 69501-09) beginning with Paragraph 11 (Exh 7).
Mr. Karras states that on January 27, 1982, he analyzed an aliquot
of Sample 57970, using the silica gel cleanup procedure and Method 608
beginning with Paragraph 11 as in the original test. The analysis
resulted in a determination of 70 ppm PCBs. He further states that at
the time of the mentioned analysis on January 27, 1982, he was conducting
a laboratory quality assurance program under which he analyzed a sample
of waste oil spiked with a known standard of PCBs. He also prepared a
quality control chart, covering the period June 1981 through September
1982, to measure intralaboratory variability of the PCB analysis (Exh 2
of affidavit). This indicates that intralaboratory variability in
January 1982 was from 74.6 to 127.4 percent at a 99 percent confidence
level. Using the lower confidence [variability] level for the January 27,
1982, analysis of Sample 57970 produces a result of 52.44 ppm of PCBs
(70.3 ppm x 74"6 percent), which is above the 50 ppm enforcement limit.
Responding specifically to assertions in Mr. Ziegler's affidavit
concerning the paper presented at the Pittsburgh Conference showing an
-------
8
interlaboratory variability of PCBs at the 50 ppm threshold for Stablex-
Reutter of +67.7 percent at a 95 percent confidence level, Mr. Karras
points out that the EPA Region II laboratory did not participate in the
study and that the only appropriate measure of variability for the EPA
laboratory is his study on intralaboratory variability previously
mentioned. Regarding the NBS study, the EPA Region II laboratory was
again not a participant. Mr. Karras states that without having more
information as to the conduct of the NBS study he is unable to comment
thereon, specifically whether samples of waste oil analyzed were cleaned
prior to analysis, what cleanup procedures and gas chramatograph detectors
were used, and the training and experience of individuals conducting the
analysis. He points out that data accumulated using several cleanup
procedures, multiple analytical procedures and performed by individuals
with varying degrees of experience can be expected to demonstrate a much
higher variability, than in a single laboratory using stringent quality
control procedures such as the EPA lab involved here. It is asserted
that without such data, the results of the NBS study are not meaningful.
He emphasizes that Mr. Ziegler acknowledged that intralaboratory
variability data is much preferred to interlaboratory data.
Respondent's brief and an additional affidavit of William J. Ziegler,
Laboratory Manager of Stablex-Reutter, Inc., were received on March 31,
1983. Mr. Ziegler points out that no evidence concerning the analysis
of Sample No. 57970 performed by Mr. Karras on January 27, 1982, was
introduced at the hearing on this matter and that because Method 608
requires that all samples be extracted within seven days and completely
-------
9
analyzed within 30 days of collection, the January 1982 test may not be
regarded as a valid replicate determination (11 4). It is asserted that
the control chart submitted as Exhibit 2 of Mr. Karras1 affidavit covers
the period June 28, 1981, through September 25, 1982, and is not appli-
cable to the July 22, 1980 test involved here (1[ 8) . Moreover, in the
absence of data on the matrix used, the chart is of little value because
there is a much lower degree of variability in analysis of a water
sample than in a more complex matrix such as a waste oil. The affidavit
states that quality assurance data in the form of duplicate determinations,
spiked analyses, control charts, internal standards, analysis of field
blanks, reagent blanks or alternate column chromatography were not
provided to support the July 1980 analysis and that in the absence
thereof, inter laboratory variability at the 50 ppm limit must be
considered (11 5).
Mr. Ziegler states flatly that Mr. Karras has failed to demonstrate
that his analysis was in control using the required protocol for PCB analy-
sis set forth in listed EPA publications including Method 608, and EPA-EMSL
The Analysis of Polychlorinated Biphenyls in Transformer Fluid and Waste
y
Oils, June 24, 1980. He further states that sections on chromatographic
2_/ Respondent's Exh 5. II 10.6.2 of the cited procedure provides:
"10.6.2 If individual retention time varies by more
than 10% over an eight-hour period or does not fall
" within 10% of an established norm, the system is "out
of control." The source of retention data variation
must be corrected before acceptable data can be
generated."
-------
10
operating cx>nditions call for the lose of an internal standard of p,p'-DDE
in every sample and standard for proper identification of PCBs and to
prove that the gas cnranatograph is functioning properly. He raises
doubts as to the value of the control chart in supporting the accuracy
of the EPA test, saying that it is not clear whether waste oils were
used as the matrices or whether the tests were conducted at the 50 ppm
regulatory limit (II 8-10). Replicate determinations were allegedly not
performed nor were replicate control charts provided for any period of
time, pertinent to the initial analysis of Sample 57970, demonstrating
the precision of the EPA Region II laboratory in PCB analysis of waste
oils (11 11 & 13). Laboratory and field replicate data and data on the
analyses of fortified samples were not reported as required by 1[ 12.2 of
EPA Method 608 (11 14).
Mr. Ziegler cites II 7.1 of EPA Method 608 specifying that each time
a set of samples is extracted or there is a change in reagents, a method
blank should be processed as a safeguard against chronic laboratory
contamination, asserts that EPA could not provide data that this was
accomplished for either the July 22, 1980 analysis or the January 27,
1982 analysis and asks rhetorically what guarantee is there that such
[laboratory] contamination did not occur or that the sample containers
were free from contamination (11 12). He also cites 44 FR No. 233,
December 3, 1979, at 69553 as requiring analysis of a field blank and
states that this protocol was not followed by EPA in the case of Sample
No. 57970. Absent analysis of a field blank or documentation that
sample containers were cleaned as specified in Section 3 of EPA Method
-------
n
608, there is, according to Mr. Ziegler, no evidence to prove that the
container has not been contaminated (1| 13). Mr. Ziegler complains that
the single calibration run by the EPA laboratory is not in accordance
with II 6.1 of Method 608 requiring that calibration standards be prepared
covering two or more orders of magnitude that will completely bracket
the working range of the chromatographic system (11 15). The lack of
such calibration standards allegedly makes the result (quantitation)
obtained on Sample 57970 highly questionable.
Mr. Ziegler maintains that the use of an internal standard of p,p'~
V
DDE is a matter of routine, citing II 11 of the EMSL procedure, and
not an option, but must be followed because it is the only way to certify
that the gas chromatograph is functioning properly and positively identify
the presence of PCBs without bias or error from small deviations in
absolute retention times (II 16). It is emphasized that identification
of PCBs (Aroclor) is based on relative and not absolute retention
times, that an internal standard is essential for the very identity of
PCBs in a complex matrix such as waste oil and that absent an internal
standard, Mr. Karras1 opinion that the peaks matched Aroclor 1260 is
totally arbitrary. Mr. Ziegler says that the data provided in his study
and the NBS study are the first studies on analytical variability of PCB
analysis of waste oils at the 50 ppm limit (11 17). He asserts that EPA
procedures were being used by laboratories, known to be competent in PCB
3/ EMSL procedure at the time of the initial test on Sample
No. 57970 was a draft "The Analysis of Polychlorinated Biphenyls In
Transformer Fluid and Waste Oils," dated June 24, 1980 (note 2 supra),
which has now been finalized "The Determination of Polychlorinated
Biphenyls in Transformer Fluid and Waste Oils," EPA-600/4-81-045
(Exh 3 to Karras affidavit of February 18, 1983).
-------
12
analysis, involved in the studies and that unless EPA can demonstrate
intralaboratory variability for PCBs at the 50 ppm limit, it is valid to
use his data and NBS data to evaluate the statistical significance of
results obtained on Sample 57970. In fact, he argues that there is no
choice but to use "round robin" data in evaluating evidence in this
matter.
Examining chromatograms of tests 'conducted by the EPA laboratory on
January 27, 1982, submitted with Mr. Karras1 affidavit of February 18,
1983, Mr. Ziegler alludes to inconsistencies, which he contends raise
similar questions as to the July 22, 1980 analysis (11 18). He notes
that the chromatogram (Exh 1 of the Karras affidavit) reflects that a
one milliliter sample size was used and that Mr. Karras testified at the
hearing that a one milliliter sample size was also vised in the July 1980
analysis (1[ 19). He points out that the EMSL procedure (June 24, 1980)
specifies that the aliquot must be accurately weighed and states that it
is impossible to accurately pipet a one milliliter aliquot of a viscous
waste oil. He refers to 11 7.2 (7.2.2 of the April '81 procedure) which
specifies that the size of the aliquot taken must be determined within
+0.001 grams, asserting that failure to do this would add an additional
error that could be as high as +20 percent in addition to the normal
variability of the test method when performed in a proper manner.
According to Mr. Ziegler, this means that if normal variability is +25.4
percent, total variability could be as high as 45.4 percent, which would
extend the EPA Region II determination at the 95 percent confidence
level to 40 ppm, below the TSCA limit.
-------
13
Mr. Ziegler refers to markings on the chromatograms submitted with
Mr. Karras1 affidavit, which he contends indicate that the calculations
shown thereon could be off by a factor of 100 so that the result of 70.3
ppm PCB should be 0.703 ppm (II 20). This is because the markings appear
to indicate that a one milliliter aliquot of oil was diluted to 100
milliliters, which dilution .was not recognized in the calculations.
Responding to these contentions, Complainant, while acknowledging
that 11 8.3 of Method 608 requires that all samples must be extracted
within seven days and completely analyzed within 30 days of collection,
I/
contends that Mr. Ziegler misrepresents the purpose of this requirement.
It is asserted that the Method was originally developed for the analysis
of wastewater samples, that the purpose of the 30-day requirement is to
prevent degradation of the samples and that the re-analysis of Sample
57970 on January 27, 1982, 500 days after it was collected, in no way
prejudiced Respondent because if the extended holding period had any
effect at all, it was to Noble's advantage in that the concentration of
PCBs in the sample was understated (Id. at 8, 9). Mr. Ziegler is of the
opinion that degradation of PCBs is unlikely because of their high stability/
agrees that extended holding times may understate the level of PCBs, but
says that extended holding times may also overstate the level of PCBs, due
v
to volatilization of the lighter hydrocarbon fractions. It is emphasized
47 Response of April 11, 1983, at 7. This argument appears
inconsistent with the contention (at 16, infra) that extraction is
applicable only to water samples. Paragraph C.2. of the Silica Gel
Cleanup Procedure (EPA Exh 8), which is clearly applicable to oil samples,
significantly refers to Method 608, 44 FR No. 233, December 3, 1979,
69501-09, in its entirety, rather than just selected portions thereof.
5/ Affidavit, dated May 2, 1983, at 2. The Webb and McCall
article cited in the EMSL procedure, Quantitative PCB Standards for
Electron Capture Gas Chromatography (Journal of Chromatographic Science,
Vol. 11, July 1973, at 366), states that chromatograms of PCBs usually
show some evidence of degradation or metabolism (Id. at 369). While
this is understandable, if, for example, the sample is animal tissue, it
is not clear that this applies to waste oils.
-------
14
that Mr. Karras testified at the hearing that in analyzing Sample
No. 57970, he used Method 608 beginning at II 11 (Tr. 178).
The fact that Mr. Karras did not use an internal standard in the
analysis of Sample No. 57970 on July 22, 1980 was elicited in cross-
examination of Mr. Karras at the hearing (Tr. 196). Disputing Mr. Ziegler's
assertion that an internal standard is required on every sample for
proper identification of PCBs, Complainant cites 11 11.5 of the EMSL
procedure (EPA-600/4-81-045, note 3, supra) and contends that an internal
standard is required only when the source of Aroclors or PCBs is not
apparent. The first sentence of the cited paragraph provides "If the
parent Aroclors or source of PCBs is not apparent, calculate the concen-
tration according to the procedure of Webb and McCall." (note 5, supra).
The identical statement appears in 11 11.4 of the draft procedure.
According to Mr. Karras, the Webb and McCall procedure uses an internal
i/
standard, but an internal standard was inappropriate in his analysis
of Sample No. 57970 on July 22, 1980 and January 27, 1982, because he
was able to identify the source of the peaks as Aroclor 1260 (Affidavit
at 11 7).
Complainant points out that the quotation relied upon by Mr. Ziegler
in 11 16 of his affidavit relative to analysis of standard mixtures of
6_/ The Webb and McCall article (note 5, supra) provides that the
[QC] peaks are identified by their retention times relative to p,p'-DDE
and recommends that this be adopted as a standard method for designating
individual PCB GC peaks. Mr. Ziegler testified that p,p'-DDE was a
pesticide residue and that "you add that internal standard and you
quantify your retention times, which is a measure of identity when the
peaks come out on the GC trace. You use the standards as a relative
standard to when the materials are coming out and that is how you make
your identification of PCB's" (Tr. 289). According to Mr. Ziegler, this
was critical in electron capture analysis and additional quality control
is necessary to demonstrate that all possible interferences had been
removed in the cleanup.
-------
15
each Aroclor is contained in 11 11.4.2 of the draft version of the EMSL
procedure/ implying that a similar requirement is not contained in the
final version. While this is incorrect as 11 11.5.2 of EPA 600/4-81-045
contains an identical requirement, Mr. Ziegler's position appears to
z/
overlook the alternative to use of p,p'-DDE as an internal standard.
Mr. Ziegler expresses the opinion that he would not leave it to personal
judgment as to whether a sample chroitatogram sufficiently resembles a
standard Aroclor, says that an internal standard is easy to use, that data
interpretation without an internal standard is pure opinion, but that data
interpretation based on relative retention times is irrefutable scientific
fact (Affidavit of May 2, 1983, at 17).
Concerning Mr. Ziegler's statement that the EPA control chart
(Exh 2 of Karras affidavit) does not reflect the matrix used, Complainant
notes that 11 4 of the Karras affidavit clearly states that a sample of
waste oil was spiked with a known quantity of PCBs (Response at 10).
This, of course, falls short of a declaration that waste oil was the
matrix involved in all tests on the chart. The level of PCBs involved
in the spike is also not stated. Mr. Ziegler's criticism (11 12 of
affidavit) that EPA was unable to furnish data substantiating use of a
method blank as required by 11 7.1 of Method 608 is dismissed as being
based on a misrepresentation in that the cited paragraph is applicable
7/ Paragraph 11.4.2 of the EMSL draft (11 11.5.2 of 60014-81-045)
provides in part: "Determine the relative retention time (RET) of each
peak in the standards with respect to p,p'-DDE or assign the RRT shown
in the figures [ chromatograms of Aroclors, Figures 3, 5 and 6 in the
procedure] to the corresponding peak in the standard, (emphasis supplied)
Identify the RRT of each PCB in the sample by comparing the sample
chromatogram to the standard chromatograms."
-------
16
to analysis of water samples, and provides in part: "Each time a set of
samples is extracted * *." Extraction is assertedly inapplicable to
i/
analysis of oil samples which are prepared by dilution with hexane.
Answering, Mr. Ziegler declares that the method of preparation of the
sample has nothing to do with whether a method blank needs to be analyzed
(Affidavit of May 2, 1983, at 5). He cites II 10.5 of EPA/600-4-81-045,
providing -that each time a set of samples is analyzed or there is a
change in reagents, a laboratory reagent blank should be processed as
a safeguard against contamination, and alleges that a method blank is
always necessary to prove that a laboratory's reagents, glassware and
equipment are free from contamination. Regarding Complainant's contention
that analysis of a field blank is only necessary in connection with EPA
Methods 624 and 625 (44 FR No. 223, December 3, 1979, at 69553), he
acknowledges that the cited reference (Appendix III) concerns detailed
quality assurance measures for priority pollutant analysis using GC/MS,
that Appendix I of the cited reference concerns QC methods for priority
pollutant analysis (Methods 601 thru 612) and asserts that the sampling
considerations in this section including the importance of a field blank
are applicable to Appendix I. He maintains, however, that use of a field
blank is critical to prove that contamination has not occurred in the field
or that sample bottles used for collection of samples are free from con-
tamination and states that no other technique exists to guarantee
contamination free sample containers.
8/ See note 4, supra. Extraction can, of course, simply mean
withdraw and in this sense it would not seem likely that a one percent
oil/hexane sample would be made without withdrawing oil from the initial
sample container. Extraction can also imply a chemical process, which
appears to be a type of process described in 11 9 of Method 608 entitled
"Sample Extraction."
-------
17
Complainant attacks Mr. Ziegler's criticism of the calculations on
the chrtmatogram (Exh 1 to Karras affidavit) as being possibly off by a
factor of 100 as illustrating a profound lack of understanding of the
procedures used by Mr. Karras in testing the sample (Complainant's
Response at 12). It is pointed out that 11 C.2. "Sample Preparation" of
the Silica Gel Cleanup Procedure provides in part "Carefully transfer
1.0 ml of 1% oil sample to the column" and that Mr. Ziegler's apparent
assumption that 100 ml of the sample was passed through the column is
i/
incorrect. Mr. Ziegler denies any assumption that 100 ml of oil was
placed on the silica gel column, saying that this would definitely over-
load column capacity (Affidavit of May 2, 1983, at 6). He states that a
common practice is to place one ml of oil on a column and elute this by
adding 100 ml of solvent, the entire eluent being collected. He explains
that a common practice is to take the eluent and concentrate it, using
Kuderna-Danish glassware, back to the original sample size of one ml,
indicating that in the process sensitivity has been increased, and
interfering hydrocarbons have been removed. He again refers to markings
on the chromatogram of the test conducted January 27, 1982, which clearly
state "1 ml sample to 100 ml, F.V. = 1 ml" and emphasizes that "F.V. must
stand for final volume." He asserts that if it does stand for final volume
there is definitely a factor of 100 error in the calculations. He further
9/ Paragraph 12.2 of Method 608 provides that results are to be
reported in micrograms per liter without correction for recovery data.
It is also noted that 11 7.2 EMSL procedure, draft and final version,
provides for dilution at the rate of 100:1 for samples [containing PCBs]
in the 0 to 100 mg/kg range. Moreover, it is of interest that a completed
analysis report, dated July 1980, furnished in a prehearing exchange,
but not offered in evidence, reflects the value for Sample 57970 as
76000.0 ug/L PCB-1260. The report indicates that this test was conducted
on July 16, 1980, while testimony at the hearing was to the effect that
the test relied upon was conducted on July 22, 1980 (Tr. 187, 192-93, 195).
It is not clear whether this is an error as to date or a different test.
-------
18
asserts that if the "in-house" silica gel procedure was followed, there
is no need for the markings "F.V. = 1 ml" on the chromatogram and argues
that these markings raise legitimate and serious questions as to whether
Mr. Karras followed his method in detail.
Mr. Ziegler avers that he was well aware that EPA Method 608 involved
wastewater samples, points out that the silica gel cleanup procedure used
by Mr. Karras appears to be an in-house and not a published method, and
that although this procedure involves waste oils, the chromatographic
method used (Method 608) applies to wastewater samples (Affidavit of
May 2, 1983 at 2-3). He disclaims any implication that silica gel cleanup
of environmental samples is not an approved technique, noting there are
several silica gel cleanup techniques in EPA publications. He notes that
Method 608 was used notwithstanding availability of the draft EMSL
procedure, dated June 24, 1980 (see notes 3 and 4, supra) and that this
enables Complainant to "pick and choose," omitting procedures considered
inconvenient, while nevertheless, contending approved procedures were
followed. He contends that it is clear that appropriate methods and
quality assurance protocols were not adhered to in the analysis of Sample
57970.
Alternative Motion
As indicated previously, Respondent has moved in the alternative
that the hearing be reopened on the issue of the civil penalty, the
basis for this* alternative is the contention that Respondent at all
times intended that there be a subsequent hearing on the penalty after
-------
19
liability was first determined (Memorandum of Law In Support of
Respondent's Motion to Reopen the Hearing, dated January 19, 1983, at
14). In a footnote (Id. at 15), Respondent argues that it is entitled
to show that no useful purpose would be served by the imposition of a
civil penalty because: "(1) Noble provides an important economical
alternative to disposal of waste oil by recycling that oil and permitting
its reuse by the people of New Jersey and elsewhere; (2) there is no
indication or allegation that Noble knew or should have reasonably known
in the course of its purchase of waste oil from various dealers through-
out the state that PCBs may have been present in the oil; (3) Noble at
all times fully cooperated with the EPA even though it had good cause to
believe that EPA's sampling and analysis were scientifically invalid;
and (4) the imposition of a civil penalty would be a uniquely punitive
action without any possible purpose of deterrence." Presumably, evidence
bearing on the listed matters would be offered if the motion was granted.
Opposing the alternative motion, Complainant asserts that there is
no basis for Respondent's bifurcated hearing theory and points out that
the complaint, dated January 24, 1981, informed Respondent that it could
request a formal hearing to, inter alia, "contest the appropriateness of
the amount of the proposed penalty." It is further pointed out that
Rule 22.27(a) of the Rules of Practice (40 CFR Part 22) provides in part
that the initial decision shall include a "recommended civil penalty
assessment, if appropriate." (Memorandum In Opposition to Respondent's
Motion to Reopen the Hearing, dated February 22, 1983, at 22-23).
Additionally, the prehearing correspondence between the ALJ and prior
-------
20
counsel for Respondent cited at 13-14 of the initial decision, and the
Trial Memorandum, dated January 21, 1982, wherein it is argued at 17-18
that the imposition of any penalty would be inappropriate* are cited to
refute any suggestion that Respondent did not understand that the hearing
included the issue of an appropriate penalty, if liability was found
(Opposition at 23-24). Complainant also points out that in a similar
PCB enforcement proceeding under the Toxic Substances Control Act (Oil
Recovery Company, Inc., Docket No. II-TSCA-PCB-81-0106) the hearing of
which was held seven months prior to the instant hearing, and wherein
counsel for Respondent herein represented respondent in that case, the
issue of whether liability and the amount of the penalty would be
considered in a single hearing was specifically considered and resolved
in the affirmative (Memorandum in Response to Respondent's Reply Brief,
dated April 11, 1983, at 15-17).
Discussion
Rule 22.28 of the Rules of Practice (40 CFR Part 22) entitled
"Motion to reopen a hearing" provides in pertinent part:
" (a) Filing and content. A motion to reopen a hearing
to take further evidence must be made no later than
twenty (20) days after service of the initial decision
on the parties and shall (1) state the specific
ground upon which relief is sought, (2) state briefly
the nature and purpose of the evidence to be adduced,
(3) show that such evidence is not cumulative, and
(4) show good cause why such evidence was not adduced
at the hearing. The motion shall be made to the
Presiding Officer and filed with the Regional Hearing
Clerk."
-------
21
Complainant says that the quoted rule appears to be patterned after
and to serve the same purpose as Rule 59 (a), Federal Rules Civil Procedures
"New Trials; Amendment of Judgments" (Opposition at 8). It is
argued that new trials are not favored and that the grant of a new trial
in non-jury cases is limited to situations where there has been a manifest
error of law or mistake of fact, citing Wright & Miller, Federal Practice
and Procedure, Civil § 2804 (1973). The affidavit of Attorney Alan G.
Kelley in support of the motion to reopen acknowledges that the Ziegler
data on analytical variability (standard deviation) of PCB analysis was
first made available after the hearing in this case and makes it clear
that the basic thrust of the motion is that the interests of justice
require that the hearing be reopened (Id. at II 5 & 6). A motion under
FRCP Rule 59 upon the ground that the interests of justice require a new
trial is at odds with the policy that there be an end to litigation and
thus will be granted only in unusual or extreme situations. This would
seem to be especially true of the after occurring events or after acquired
10/
data involved here. As counsel points out, however, Mr. Ziegler
10/ EPA quotes the following from State of Washington v. United
States, 214 F. 2d 33 (9th Cir. 1954):
"The policy of Law in having an end to
litigation would in most cases prevent
the reopening of a case because of after-
occurring events [citation omitted]
But," a general exception exists where
substantial justice requires a reopening
and when the after-occurring event is of
major importance in its impact on the case."
214 F. 2d at 46-47.
This, of course, clearly indicates that an after-occurring event having a
major impact on the decision, may be a ground for a new trial in the federal
courts.
-------
22
testified at the hearing that he was evaluating the variability of the
50 ppm TSCA limit and would be presenting a paper on that subject at the
Pittsburgh Conference on Analytical Chemistry in March of that year
(Tr. 227, 256). Evidence is lacking as to the status of that research
at the time of the hearing herein.
Complainant contends that Respondent has failed to identify the
specific grounds for its motion, that Mr. Ziegler is making essentially
the same points questioning the EPA test procedure in his affidavit as
he did in his testimony at the hearing and thus Respondent has failed to
show that the evidence proposed to be adduced is not cumulative and
lastly, that Respondent has failed to show good cause why the evidence
was not adduced at the hearing (Opposition at 13-14). Pointing to the
uncertain status of Mr. Ziegler's research paper at the time of the
hearing, Complainant asserts that Mr. Ziegler could have testified as to
the results of his research or Respondent could have requested an
adjournment to enable further testimony after the paper had been completed
and presented at the Pittsburgh Conference.
Replying, Respondent argues that the FRCP and cases decided there-
under are inapplicable, that its motion is clearly permitted by the
Rules of Practice, that there is no reason for these rules to be applied
in a rigid, talismanic fashion, that its motion complies with the minimum
IV
requirements of Rule 22.28 and that fundamental fairness requires
IV Mthbugh most of the cases cited by Respondent involve rulemaking
under the APA, Trujillo v. General Electric Co., 621 F. 2d 1084 (10th Cir.,
1980) & Duval Corp. v. Donovan, 650 F. 2d 1051 (9th Cir., 1981) involve
adjudication and stand for the proposition that administrative bodies have
inherent authority to reconsider their decisions and that an agency's action
on a petition for reconsideration is discretionary.
-------
23
that the hearing be reopened, in that the previously unavailable
statistical evidence sought to be introduced has a profound impact on
the reliability of the EPA test and upon the threshold question of
Respondent's liability for the alleged violation (Reply Brief at 4-10).
Respondent also disputes Complainant's contention that the control chart -
showing intralaboratory variability furnished with the Karras affidavit
of February 18, 1983, establishes that the interlaboratory data supplied
by Mr. Ziegler is inapplicable (Reply Brief at 11, et seq.). Respondent
argues that it should be permitted to cross-examine Mr. Karras as to why
this chart, which allegedly was in existence at the time of the hearing,
12/
was not produced or referred at the time. It is pointed out that the
chart fails to indicate the matrix or the PCB spike level used in the
tests and that if, through cross-examination of Mr. Karras, these were
shown to be inappropriate, Complainant's argument that it has intra-
laboratory data, which is preferable to the interlaboratory data proffered
by Respondent, must fail (Id. at 13). Respondent further argues that
Complainant's submission of a control chart, allegedly made in conjunction
with the test on an aliquot of Sample No. 57970 approximately 18 months
after the sample was drawn, constitutes belated recognition of the
invalidity of the July 1980 analysis and that this invalidity cannot be
cured by a test made long after the 30-day period specified by Method
12/ OnelDbvious and likely reason is that the test on an aliquot
of Sample No. 57970 conducted in January of 1982 was far beyond the
30-day requirement of H 8.3 of Method 608 (note 4, supra, and accompanying
text). It is also noted that the final version of the EMSL procedure
(11 10) requires precision and accuracy data to be maintained after
January 1, 1982.
-------
24
608 (Id. at 14-15). Respondent reiterates its belief that two hearings
would occur as a reason for reopening the hearing on the issue of the
civil penalty (Id. at 19-20).
Although Respondent may well be correct that administrative agencies
are not bound by rigid rules applicable to courts and, consequently, have
more discretion in acting upon petitions for reconsideration or motions
to reopen the record, it is nevertheless fundamental that motions to
iy
reopen the record should not lightly be granted. Here it is obvious
that the principal original basis for the motion, i.e., that evidence
bearing on the analytical variability (standard deviation) of analyses
of PCBs in waste oil matrices, first made available after the conclusion
of the hearing, would preclude a finding that the PCB concentration of
76 ppm determined herein was in excess of the regulatory limit of 50
ppm, has been broadened into a full scale attack on the validity of
Complainant's conduct of the analysis in question. This is no doubt due,
at least in part, to data, a control chart and an analysis of Sample
57970 conducted on January 27, 1982, supplied in opposition to the
motion, .which were apparently available at the time of the hearing
(February 9-11, 1982), but not referenced or offered in evidence. If
this data were essential to support the finding of 76 ppm PCBs upon
which the finding of violation is based, it is clear that the motion
would, of necessity, be granted, because Respondent had no opportunity
to question such data through cross-examination or otherwise at the
hearing.
13/ This is not only because of the expense and inconvenience of
hearings, but also because the prevailing party should not be subjected
to the risk of having a favorable decision overturned in the absence of
substantial reasons.
-------
25
It is concluded, however, that quality control data and evidence
concerning the analysis of Sample 57970 conducted on January 27, 1982,
are not essential to support the finding of 76 ppm PCBs. This is
because Mr. Karras, the analyst who conducted the July 1980 test, testified
that he ran a known standard of PCBs and compared the resulting chromato-
gram with previous chromatograms to assure that the chromatograph was in
good working order (Tr. 196-97). This coupled with the testimony that
he used the Silica Gel Cleanup Procedure (Government Exh 8) in preparing
the sample and ran the analysis in accordance with 11 11 of Method 608
(Government Exh 7) is sufficient to support the validity of the analysis
14/
as against other evidence in the record tending to detract therefrom.
For the question is not whether detailed testimony or documents in
evidence establish, for example, that the sample containers were free of
contamination, that cleanup procedures were properly followed and substances
which might interfere with the identification of PCBs removed, that the
sample aliquots of oil were properly measured or weighed and diluted
with the appropriate amount of hexane, which dilution was properly
recognized in the calculation of PCB levels or quantities and PCB peaks
properly identified, but rather, whether there is sufficient evidence in
the record of deficiencies in the foregoing or other respects of the
14/ That evidence was detailed in the initial decision and need
not be repeated here. Regarding Mr. Ziegler's preference for a Hall
electrolytic conductivity detector rather than the GC electron capture
detector used here, because the former is halogen specific and will not
respond to interferences, Complainant points out that both the draft and
final EMSL procedure recognize that other semi-specific detectors such
as BCD may be used where sample chromatographic peaks closely match those
of the standards and provided proper cleanup procedures are followed.
-------
26
test as to cast substantial doubt upon the validity of the conclusion
that the level of PCBs in Sample 57970, and thus in Tank No. 4, was in
excess of 50 ppm. The point being that Mr. Karras could have been
cross-examined on all of these matters and the significance of any
deficiencies thus revealed supported by the testimony of Respondent's
expert, which might have afforded a more substantial basis for Respondent's
contention that the test was scientifically inadequate.
As noted earlier, the fact that Mr. Karras did not use an internal
standard in the analysis of Sample 57970 in July of 1980 was elicited in
cross-examination at the hearing. Although Mr. Ziegler is critical of
the failure to utilize an internal standard, contending that this places
too much confidence in the personal judgment of the analyst, identifying
RRTs of PCBs in the sample by comparing the sample chromatogram to
standard chromatograms is sanctioned by the J34SL procedure (note 7, supra,
and accompanying text).
The foregoing demonstrates that Respondent's attack on the validity
of the analysis of Sample 57970 is largely cumulative of matters which
were either specifically raised or by necessary implication inherent in
issues considered in the initial decision and cannot support a motion to
15/
reopen the record. This includes Mr. Ziegler"s complaints that data
concerning quality assurance measures have not been furnished, that no
evidence of analyses of field and method blanks to assure contamination
15/ Whatever may be the proper construction of the 40 CFR 22.28,
it would seem to be clear that the rule is not intended to and cannot
serve as a vehicle for correcting errors in strategy or oversights of
counsel at the hearing. If it was otherwise, the concept of finality
would have no meaning.
-------
27
free sample containers and instruments have been provided, that his
concerns about a possible error by a factor of 100 in the calculation of
16/
PCB levels have not been answered and that the method of sanple
preparation has not been documented so as to establish that an accurate
aliquot of oil was measured or weighed.
Concerning the principal basis of the motion, there is, of course,
nothing new or startling about the concept of analytical variability
(standard deviation) of analyses of PCBs or other substances for that
matter. For example, the Vfebb and McCall article (note 5, supra) contains
data on the relative standard deviation of analyses of various Aroclors,
calculated as a percentage of the mean of the results. Similar or
identical data is contained in the draft EMSL procedure, dated June 24,
1980, and the final version, EPA-600/4-81-045. Paragraph 13.1 of Method
608 states that EMSL is in the process of conducting an interlaboratory
method study to determine the accuracy and precision of this test
procedure. Moreover, Mr. Ziegler was questioned on this precise point
during the hearing and he replied that the precision of the test depended
not only upon how the test was run, but upon the matrix being analyzed
(Tr. 259). He indicated that the variability of analyses of PCBs in water
samples was less than that of an oil or hydrocarbon sample and that his
laboratory liked to keep the relative standard deviation at better (less)
than a plus or minus 20 percent difference.
16/ This concern results from calculations on the chromatogram of
Sample 57970, which was run on January 27, 1982. As noted, supra at 25,
this chromatogram is not essential to support the finding of 76 ppm PCBs.
-------
28
Accordingly, the only new evidence offered in support of the motion
is data on inter laboratory variability, which has not been established
as applicable to an analysis conducted on July 1980 by a laboratory not
participating in the 1982 studies which generated the data. Accordingly,
even if this inter laboratory variability data were admitted into evidence,
17/
it is unlikely to change the result. Respondent is relying on the
interests of justice and fundamental fairness to support the notion, and
a requirement that the preferred evidence be likely to change the result
seems reasonable.
Respecting the alternative basis of the notion, Respondent has
offered no explanation for its asserted belief that the issue of the
penalty would be considered at a second hearing only after liability was
determined in the first instance. Indeed, in view of the complaint, the
rules of practice and the prehearing correspondence cited in the initial
decision, it would appear that no reasonable basis for such a belief
could exist. Moreover, as Complainant points out, Respondent's silence
at the hearing as to any possible second hearing where the issue of
penalty would be considered, militates strongly against the existence of
IT/ As found in the initial decision, duplicate samples from each
of the tanks were left with Respondent at the time of the inspection
on July 15, 1980. Respondent's silence as to the disposition of these
samples and the results of any analyses conducted thereon, could afford
the basis for an inference that such evidence would be adverse to
Respondent.
-------
29
such a belief at the time. If the amount of the penalty is unduly
18/
burdensome, Respondent would not appear to be totally without remedy.
19/
Conclusion
20/
The motion to reopen the record is denied.
Dated this / (s~ day of May 1983.
Spencer T. Nissen
Administrative Law Judge
18/ Although the Federal Claims Collection Act of 1966 (31 U.S.C.
951-53) provides for a limit on authority of the head of an agency to
conpromise claims to those that do not exceed $20,000, it also provides
that the Act is not intended to diminish authority to settle or compromise
claims and the agency would appear to have inherent authority to enter into
an agreement for payment in installments or to otherwise compromise the
claim based on economic hardship.
19/ Respondent's request for oral argument on the motion is denied.
20/ In accordance with 40 CFR 22.28(b), the filing of the motion
operated to stay the running of the 20-day appeal period provided by
40 CFR 22.30(a).
-------
23
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY '«
BEFORE THE ADMINISTRATOR
In the Matter of )
)
Finch F-uel Oil Company, ) Docket No. II TSCA-PCB-82-
) 0104
Respondent )
Toxic Substances Control Act_- PCBs - A distributor who
purchases waste oil which ha"H been diluted so as to
reduce the concentration of PCBs below 50 ppm, does not
violate the PCB rule, unless he knows or has reason to
know that the oil had been diluted.
Toxic Substances Control Act - PCBs - Complaint against
distributor of waste oil dismissed where facts do not
show that oil purchased by the distributor was the same
oil that had been tested six days^before the.distributor
had made his purchase, and had been found to contain
over 50 ppm PCBs.
Ap pea ranees:
Gregory T. Halpert, United States Environmental
Protection Agency, Region II, New Yor, New York,
for Complai nant.
Victor F. DeVito, 591 Summit* Avenue, Jersey City,
New Jersey, for Respondent.
-------
INITIAL DECISION
This is a proceeding under the Toxic Substances Control
«
Act ("TSCA"), Section 16(a), 15 U.S.C. 2615(a), for the
assessment of civil penalties for violation of the rule
entitled "Polychlorinated biphenyls (PCBs) Manufacturing,
Processing, Distribution in Commerce, and Use Prohibitions"
(hereafter "PCB rule"), 40 CFR Part 761.I/ The proceeding was
instituted by a complaint issued on June 1, 1982, charging
that Respondent Finch Oil Company had distributed in commerce
oil containing PCBs in excess of 50 parts per million ("ppm")
in violation of 40 CFR 761.30(c). A penalty of $20,000 was
requested. Respondent answered and denied the charges and
also put in issue the appropriateness of the amount of the
*.
proposed penalty. A hearing was held in Newark, New Jersey .
on November 30, 1982. Following the hearing the parties sub-
\
mitted briefs on the legal and factual issues. On consider-
ation of the entire record and the submissions of the
parties, the complaint is dismissed. All proposed findings
!_/ TSCA, Section 16(a) provides in pertinent part as follows:
(a) Ci vi1 - (1) Any person who violates a provision of
section 15 shall be liable to the United States for a civil
penalty in an amount not to exceed $25,000 for each such
violation. Each day such a violation continues shall, for
.purposes of this subsecti on ,'const i tute^ a separate
violation of section 15.
- *
Section 15 of the Act provides in pertinent part, "[i}t shall
be unlawful for any person to - (1) fail or refuse to comply
with . . . (C) any rule promulgated . . . under Section . . .
6 . . . ." The PCB rule was promulgated under TSCA, Section 6(e),
15 U.S.C. 2605(e).
-------
of fact inconsistent with this decision are rejected.
Findings of Fa^t
1. Respondent Clarence P. Finch II is engaged in the busi-
ness.of selling heating fuel oiVto commercial customers. He
began his business, known as Finch Fuel Oil Company, in
1975, and.operates out of his home in Kearny, New Jersey. "
He maintains and has no fuel oil storage facilites. Transcript
("Tr."J 127, 130-31.
2. Finch purchases the fuel oil he sells primarily from the
major oil companies. On occasion_he also buys waste oil from
other sources which he blends with the fuel oil. Tr. 14, 130..
3. For several years Finch has purchased waste oil from the
Summit Metal Company of Jersey City, New Jersey. Tr. 153-56.
4. Summit salvages scrap metal that it. obtains from various
sources but primarily from transformers and other electrical
equipment. Tr. 108-09.
5. Summit drains waste dielectric oil from transformers and
other electrical equipment it purchases and stores the oil
in two tanks, one having a capacity of -about 800 gallons and
the other a capacity of about 1,200 gallons. Waste oil
collected from other sources such as diesel fuel and crankcase
oil from scrapped trucks or motors was also stored in these
tanks. Tr. 110, 112, 124.
6. On April 15, 1981, EPA employees conducted an inspection
of Summit to determine compliance with PCB regulations. In
-------
the course of that inspection, samples of waste oil were
*
collected from each tank. Sample 57858 was collected from
the 1,200 gall on .capacity .tank which .at that time contained.
about 600 gallons of waste oil. Sample 57859 was collected
.from the 800 gall on., tank-whi ch contained about.. 100 gallons
of waste oil. Tr. 8, 11; Government's Exhibits 1, 2.
7. ( Both samples were taken to the EPA Multidiscipiinary
Laboratory in Edison, New Jersey, where they were analyzed
for the presence of PCBs. Sample 57858, was found to contain
PCBs at a level of 140 ppm, and sample 57859 was found to
contain PCBs at a level of 2,400 ppm. Tr. 24-25, 67, 86-87;
Government Exhibits 3-5.
8. On April 21, 1981, Finch purchase^ 2;6DO gallons of waste
oil from Summit. This oil was pumped from the two waste oil
storage tanks described above. Summit had added waste oil
to the tanks since April 15, 1981, bringing them to their
estimated 2,000 gallon capacity, and at the time of delivery
to Finch supplemented those 2,000 gallons by another 600
gallons obtained from transformers, drums or other storage
containers at Summit. Tr. Ill, 119, 129.
9. Between April 15, 1981 and April 21, 1981, Summit probably
withdrew 50 to 60 gallons from the two tanks for use in its
- *
portable heating equipment and may have given away another 55
gallons or more to others. Tr. 117-120.
-------
Discussion and Conclusions .
The crucial and indeed only question in this case is
whether the waste oil which Finch purchased "on April 21, 1981,
contained PCBs at a concentration greater than 50 ppm. If it
did, Finch's purchase of that oil and his subsequent resale of
it was a distribution of PCBs in commerce in a non-totally
enclosed manner in violation of 40 CFR 761 . 20(c)..?_/ On the
other hand, if the waste, oil contained less than 50 ppm PCBs
at the time Finch purchased it, Finch would not have violated
the PCB rule.
Complainant argues that even if the waste oil at the time
it was purchased by Finch contained less than 50 ppm PCBs,
Finch would still be in v-iolation because dilution is expressly
prohibited by 40 CFR 761.l(b).!/ The prohibition against di-
lution was explained in the preamble to the PCB rule as intended
to prevent the deliberate dilution of concentrated PCBs to evade
2_/ .Finch does not question that his purchase of waste oil
from Summit for resale to Meadowview Hospital was distribution
in commerce. In view of the broad definitions of the term
"commerce" and "distribution in commerce" in TSCA, Sections
3(3) and (4), 15 U.S.C. 2602 (3) and (4), it is understand-
able why he has not. It is also clear that transporting the
waste oil by tank truck would not be a distribution in a
"totally enclosed manner" within the meaning of the PCB rule.
See 40 CFR 761.3(hh) and 761.20.
3/ Complainant's openi ng ..brief at 9, 21. 40 CFR 761.l(b)
provides in relevant part that, "[a]ny chemical substances
and combination of substances that contain less than 50 ppm
PCBs because of any dilution, shall be included as PCB and
PCBs unless otherwise specifically provided."
-------
the more stringent disposal requirements that apply to such
liquids..!/ Thus, the .prohi bi t i on aga i nst. di 1 ut i on would seem
to apply to one who actually dilutes the PCBs, and to those
who act in concert with him for the purpose of evading the
more stri nge/it- di sposal requirements.' Here there is no
evidence that Finch knew that the waste oil in the tanks had
been tested by. .the EPA previ ously - and. had . been. fouVid t o con-
tain PCBs in concentrations greater than 50 ppm.jj./ Assuming
that Finch knew or should have known that some or all of the
waste oil came from electrical transformers, it would have
been prudent if not obligatory for him to test what the PCB
concentration of the oil was at the time, but testing would
not have disclosed whether oil with high concentrations of
PCBs had been diluted by the addition of oil with low concen-
tration 'of PCBs. In short, Complainant's position would
require that liability be impos.ed on a distributor like
Finch, even if he was blameless so far as diluting the oil
was concerned, and had' purchased the oil in the good faith
47 See 44 Fed. Reg. 31518, 31521.
J5/ " Nor would Finch have been any more knowledgeable about the
."PCB content of Summit's oil, if he asked Mr. Brauer, the owner
of Summit. Mr. Brauer was not told by the EPA of the results
of the EPA's tests until May 15, more than three weeks after
Finch had purchased the oil. Tr. 12. Brau-er himself did not "
dp any testing" and the last previous test of Summit's oil
appears to,have been one done by the State of New Jersey in
January 1982. Brauer was never informed whether the test
disclosed any PCBs. Tr. 126.
-------
belief, corroborated by his own test, that the oil contained
less than 50 ppm PCBs. Since under such a rule the distributor -
could never be sure that he was not distributing diluted waste
v
oil, the effect would be to discourage *f not stop entirely
the distribution x>f. all .waste oil recovered from electrical
transformers regardless of their PCB concentration, a result
'which I find no support for either in the PCB rule or the
preamble. To the contrary, the preamble to the PCB rule
expressly states that waste oils that contain concentrations-
of PCBs less than 50 ppm may be used as fuel or, indeed, for
any purpose except as a sealant, coating or dust control
agent.J5/ Complainant's contention, therefore, that Finch
should be found in violation of the PCB rule no matter what the
concentrations of the PCBs in the oil he purchased is rejected.
While Finch's test of the waste oil was aot considered a reliable
indicator of the PCB content of the oil (see Infra at 7-8), still
the record does not establish that Finch knew or should have known
that the waste oil had been diluted.
t
For proof that the waste oil contained over 50 ppm PCBs
when Finch purchased it, the EPA relies on the undisputed fact
that Finch was the only one who purchased waste oil from Summit
after the EPA's inspection of Summit on April 16, 1981. To
this, Finch offers the defense that Complainant has not shown
6/ See 44 Fed. Reg. 31525.
-------
that the oil tested on April 16, 1981, was the same oil that
was purchased by Finch on April 21, 1981.
One contention made by Finch'-in its defense is that
Summit had only 700 gallons in its tanks when the EPA inspected
Summit on April 16th, while Finch took delivery of 2,600 .
r " .
gallons. As Complainant points out, however, e.ven if it be
assumed that the additional 1,900 gallons were free of PCBs,
the oil would still contain 124 ppm PCBs.^7/
A second contention made by Finch is that he had taken
a sample of oil purchased from Sumnrit which was tested and
found to contain less than one ppm PCBs. If liability in this
case turned on which test was the more reliable indicator
of the PCB content of the oil, the decision would clearly be
in favor of the EPA's test. The samples taken by the EPA were
collected in a special container, were carefully marked, and
records were kept accounting for them from the time of collection
to the time of testing.JJ/ The tests themselves can be assumed
to have been done in accordance with recognized procedures,
since there is nothing in the record to the contrary. In
_?/ See Complainant's opening brief at 9. The formula used
t"o calculate the PCB content of the 2,600 gallons is as follows:
140(ppm) x 600(ga1.) + 2,400(ppm) x 100(gal.)= 124 ppm (for the ..
2,600 (gal.)7 ' 2,600 gal.)
8/ Tr. 24-25, 39-40, 47-48, 83-84; Government's Exhibits 1-5.
-------
8
contrast, Finch took his sample in an ordinary jar, not for
the purpose of testing for P.CBs. but in order to determine ;""
whether the oil had dirt in it. His only record consisted
of marking the sample with a number - in the case of the oil
purchased on April 21, it was number 5 - and also marking
the invoice for the purchase with the same sample number.
The samples, all of which were of waste oi 1 "purchased from
Summit were then kept at Finch's house. He .had them tested
for PCBs after being visited by the EPA in September 1981._9/
While the tests themselves appear to have been done properly,
the procedures followed by Finch offered no reasonable assur-
" ^-
ance either that the sample taken from one purchased quantity
of oil could not have been confused with a sample from some
other purchased quantity, or that a sample could not have
been tampered with.
..Another reason for questioning the rel iabi1iiy of Finch's
test as an indication of the PCB content of the oil purchased
on April 21, is that to reach the level of less than one ppm,
Summit would have had to withdraw all 700 gallons of oil in its
tanks between April 15 and April 21. According to Mr. Brauer's
testimony it is hi gly. -unl i kely that oil in such a -large .qua.nt.i ty
was withdrawn.!O/ .
£/ Tr. 131 , 133, 140-41.
. ** "
1 Q/ Mr. Brauer indicated that he may have withdrawn 50 to 60
gallons for 'his own use", and that he may have given away one or
more 55 gallon drums. Tr. 1.15, 117, 119-120.
-------
A third contention made by Finch, cannot so readily be
dismissed. This is that Complainant has not really established
what the concentration of PCBs was in the waste oil purchased by
%
Finch because of the testimony by "Julius Brauer, the owner of
Summit, th'at during the period between April 15 and April 21,
/
1981, he may have u.sed 50-60 gallons of waste oil .for his outdoor
heaters, and may have given away 55 gallons or more of waste oil,
to people to whom he had regularly been giving waste oil for use
as fuel. According to this evidence, a sufficient quantity of- -
waste oil could have been withdrawn from the tank with the
oil containing 2,400 ppm PCBs, to bring the level of concen-
tration below 50 ppm PCBs, and Complainant's assumption that
the violation would be established even if the other 1,900
gallons were free of PCBs would not hold up.11/
*
Complainant argues that Brauer's testimony is too specu-
lative to be given any weight. Brauer testified on the basis
of his recollection of what may have occured 18 months pre-
viously and produced no written records. Yet, the testimony
cannot be wholly discredited, which is what Complainant would
LL/
Dr. Gervitz did testify that it was impossible to drain a tank
completely. Nevertheless, it would be necessa ry t o~ass ume that
about 20 gallons remained in the tank with the oil containing 2,400
ppm PCBs in order to bring the level of concentration of the 2,600
gallons to 50 ppm. Tr. 54. There is simply no basis for making
that asumption -on this record. For example, if all but 15 of th-e
100 gallons containing 2,400 ppm PCBs were *wi thdrawn, the
concentration of the 2,600 gallons would be 46 ppm. Using
Complainant's formula (supra at 7 n. 9), the calculation
would be as follows:
2,4DO-(ppm) x 15 (gal .) + '140 (ppm) x 600(gal) = 46(ppm)
2,600 gal.
-------
10
like to do. It is not surprising that Brauer kept no written
records of the relatively small quantities of waste oil he used
himself or gave away to others. Nor, cpntrary to what Complainant
argues, was Brauer's relationship to Finch such as to make it likely
that it was in. Br.auer's self-interest to testify in favor of Finch.
Finch has beefi only an occasional purchaser from Braver. 12/
Complainant argues that Finch could assert a claim against Brauer
if Finch is found liable and a penalty is assessed.Jjy For all
that appears in the-record, however, Finch may have purchased from
Summit at his own risk. Compl ai narrt, certainly, has furnished no
evidence as to the terms of sale to show the contrary, nor has he
explained what the legal basis for Brauer's liability would
be. In short, there is nothing in this record or Brauer's
testimony to indicate that'Mr. Brauer was not giving his
honest recollection of what may have happened to some of the
waste oil sampled.by the EPA.
It is, of course, true that Brauer did not unequivocally
state that waste oil was in fact withdrawn from his tanks and
only gave rough estimates of the quantities that he was likely
to have used or given away. If the testimony is subject to
several different inferences, however, all of which appear to
be equally possible, the consequences must be' borne, by
Complainant -and not by Respondent. Complainant's case rests
1 2J Tr. 128, 1-53-5-6* F-i rich's - normal-sources of oil were the
maj oroilcompanies. Tr.130.
13/ Complainant's reply brief at 4.
-------
on its establishing by the preponderance of evidence that
Finch's distribution of PCBs violated the PCB rule.1_4/ Finch
being the only purchaser from Summit does make a prima facie
case in that the reasonable inference to be drawn is that
the 700 gallons sampled by the EPA on April 15, were included
in the 2,.600 gallons purchased by Finch on April 21. The
burden which shifts to Finch by the prima facie case, however,
is the burden of coming forward with some credible evidence
to rebut this inference'. The burden of persuasion does not
shift merely because Complainant for its case-in-chief has
produced enough evidence to justify a finding in its favor,
if the evidence is left unexplained or unrebutted. Once
Finch has come forward with rebutting evidence the entire
record must be evaluated_to determine whether Complainant has
established by the preponderance of the evidence that Finch
distributed oil containing PCBs at a concentration greater than
50 ppm.J_5/ Here, Brauer's testimony has created too many gaps
between the EPA's inspection of Summit on April 15, and
Finch's purchase on April 21, to draw the conclusion that Finch
had purchased oil containing PCBs in excess of 50 ppm. I
/
find, therefore, that Complainant has not sustained its '
burden and that the complaint should be dismissed.
14/ 'See 40 CFR 22.24.
1 5/ Complainant argues that it must prevail unless Finch shows
tTTat all 700 gallons of waste oil were no longer in the tanks on
April 21. Complainant's opening brief at 13-14. This is
apparently based on-its argument that even if the 2t600 gall ons
contained less than 50 ppm PCBs, Finch would still be in violation
because of the prohibition against di1ution, which argument has
been rejected. Supra at 6. . .
-------
12
ORDER
It is hereby ordered that the complaint in this proceeding
be di smi ssed.
Gerald Harwood, r~
Administrative Law Judge
July 18, 1983
20/ Unless an appeal is taken pursuant to 40 CFR 22.30 or the
"Administrator elects to review this decision on his own motion,
the Initial Decision shall become the final order of the Admin-
istrator. See 40 CFR 22.27(c).
-------
24
-------
< :::-.: 22 ?3: 55
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of
Niagara Transformer Corporation, ) Docket No. II TSCA-PCB-81-0214
Respondent
Toxic Substances Control Act - PCBs - Guidelines for the Assessment of
Civil Penalties - Under all of the circumstances including Respondent's
good faith and the probability of harm, PCB Penalty Policy (45 FR No.
177, September 10, 1980, at 59770, et seq.) was determined to be
inapplicable and proposed penalty for violations of PCB rules calculated
in accordance therewith was substantially reduced.
Appearance for Respondent:
Edward J. Wagner, Esq.
Saperston, Day, Lustig, Gal lick,
Kirschner & Gaglione, P.C.,
Attorneys at Law
Olean, New York
Appearance for Complainant:
Gregory T. Halbert, Esq.
Office of Regional Counsel
EPA, Region II
New York, New York
-------
Initial Decision
This is a civil penalty proceeding under section 16(a) of the Toxic
Substances Control Act (15 U.S.C. 2615(a)). The proceeding was commenced
by the issuance of a five-count complaint by the Director, Enforcement
Division, EPA Region II, New York, New York, on August 7, 1981, charging
Respondent, Niagara Transformer Corporation, with violations of the Act
and regulations concerning the marking, handling and storage of
polychlorinated biphenyls (PCBs)J/ A penalty totaling $50,000 was
proposed to be assessed against Respondent. Respondent answered, admitting
certain of the allegations and denying others and contesting the
appropriateness of the penalty. A hearing on this matter was held in
Buffalo, New York on May 10, 1983.
Based on the entire record including the briefs and proposed findings
and conclusions of the parties, I find that the following facts are
established:
]_/ Section 2614 of the Act (15 U.S.C. 2614) provides in pertinent part:
"It shall be unlawful for any person to - (1) fail or refuse
to comply with (A) any rule promulgated or order issued under
section 4, (B) any requirement prescribed by section 5 or 6,
or (C) any rule promulgated or order issued under section 5 or
6; -."
. *
PCB rules were issued under section 6(e) (15 U.S.C. 2605(e)).
-------
Findings of Fact
1. Niagara Transformer Corporation (formerly Erie Electric Company) has
been in the business of manufacturing and repairing PCB transformers
since 1948 (Tr. 110-11). Manufacture of PCB transformers was
discontinued in 1977 and repair of PCB transformers was discontinued
in 1979. Respondent's business is apparently now chiefly the
manufacture and repair of mineral oil transformers (Tr. 13).
2. Respondent's President is Mr. Fred Darby, who had no prior connection
with the company, but assumed that position upon the death of his uncle
in January 1979 (Tr. 154). Mr. Darby relied o.n Herman Gabel, Executive
Vice President and General Manager, to keep him abreast of regulations
and developments concerning the handling, storage and disposal of PCBs
(Tr. 156). '*'*-
3. Respondent maintains two facilities, offices and manufacturing or repair
operations at 1747 Dale Road and a storage and repair facility at
1600 Seneca Street, Buffalo, New York (Tr. 15, 16).
4. On October 22, 1980, an inspection of Respondent's facilities was con-
ducted by representatives of EPA, Dr. Arthur H. Gevirtz and Deborah
Dalton (Tr. 13, 14). Dr. Gevirtz and Ms. Dalton met with Mr. Gabel, and
-------
Mr. Darby. The visit was unannounced and officials of Respondent had
no advance knowledge of the inspection (Tr. 41, 43, 112, 141).
5. Upon inquiry by the EPA representatives, Mr. Gabel produced some
records purporting to be the annual document required by 40 CFR
761.45 (1980) for the period ending December 31, 1978, but was
unable to locate the annual document for 1979 (Tr. 15). Mr. Gabel
told the inspectors that he had the document for 1979, but could
not locate it. He was informed in effect that it would be alright
if the documents were mailed to them (EPA) (Tr. 46).
6. Dr. Gevirtz was shown and examined Respondent's inventory records
relating to PCBs and Mr. GabeV furnished him a copy of each document
he (Gevirtz) requested (Tr. 113-14). In Mr. Gabel's opinion, the
data he had available was the information required to be kept in
\ ~.
an annual document. He acknowledged, however, that he did not
furnish Dr. Gevirtz a complete annual document at the time.
Mr. Gabel testified that the data was maintained in handwritten
form in a file drawer in his office and that each time there was a
change [in the PCB inventory data] he was notified (Tr. 114-15).
Respondent alleges that the inventory records included a detailed
listing of the number of drums stored on a certain date, the
number of gallons of liquid, the approximate parts per million
and the calculated weight of PCB substance (Reply Brief at 4).
The inventory record, however, (Respondent's Exh 22), which contains
-------
5
known and assumed concentrations of PCBs (700,000 ppm in some drums
and 2,600 ppm in other drums) and the weight of Askarel in kilograms
per gallon together with total weights of PCBs in kilograms, is
dated December 31, 1980, and consequently was not in existence at
the time of the inspection. Mr. Gabel, however, prepared the
inventory record (Respondent's Exh 22) from data in his files which
included parts per million of PCBs (Tr. 119). The inventory record
is based upon the assumption that each drum contained 54 gallons.
7. After a discussion of Respondent's activities and an examination of
available records concerning PCBs, Dr. Gevirtz and Ms. Dalton,
accompanied by Mr. Darby, inspected the manufacturing and storage
area (Tr. 57). In an area aproximately 30 inches below the level
of the main floor and measuring approximately 30 feet|/ by 20 feet,
referred to as the pit, well or loading dock area, was a 2,300-
gallon tank, which the inspectors were informed was filled with
pure Askarel (Tr. 18, 128, 145, 146; photo, Gov't Exh 4). Mr. Gabel
testified, however, that the tank contained approximately 1500
gallons (Tr. 146). This tank, but not the area in which the tank
was stored, contained the PCB mark required by 40 CFR 761.20 (1980).
There were two- other empty tanks.!/ and two 55-gallon drums.1/ bearing
PCB labels in the well area. The PCB labels on the tanks were at an
JJ This is an estimate by Dr. Gevirtz. Respondent asserts that the
well is actually twice that long (Reply Brief at 1).
:Ll Dr. Gevirtz remembered only one tank being in the well area
(Tr. 64).
£/ Count I of the complaint dealing with the lack of a Spill
Prevention and Countermeasures (SPCC) Plan was amended to delete reference
to these drums (Tr. 6), apparently based on Respondent's representation
that the drums were empty.
-------
6
elevation above the level of the main floor. See photos taken by
Mr. Darby immediately prior to the hearing (Respondent's Exhs 11
and 12), Mr. Gabel's testimony that the labels in the photos were
in the same place on October 22, 1980 (Tr. 132), and Mr. Darby's
testimony that the tanks looked the same when the photos were taken
as they did on October 22, 1980 (Tr. 160-61). Other objects in the
well area at the time of the inspection included at least one
transformer, a steam jenny, a painting tray and pallets (Tr. 130,
146, 159-60, 168; photos, Gov't's Exhs 5, 6 and 6A). The well area
contained tracks and a large door at the rear, allowing entry by
railroad cars or trucks (photo, Gov't Exh 3).
8. In an area to the rear of the building at Dale Road were three mineral
oil storage tanks having capacities of 3,000, 8,000 and, 12,000 gallons
*i ".
(Tr. 15, 39; photo, Gov't Exh 7). The EPA inspectors were informed
that the.tanks contained new mineral oil. Because of this information,
samples were not drawn from the tanks, as normally would have been
done, if the tanks contained used mineral oil (Tr. 40). Mr. Gabel,
however, testified that the purpose of the 3,000-gallon tank was to
hold used transformer liquid (Tr. 150, 151). A note on the annual
document for V980 (Tab A, Respondent's Exh 1) states that they had
received a test report showing 2,600 ppm PCBs in the 3,000-gallon
mineral oil storage tank not previously known to be contaminated
with PCBs.
9. Complainant has alleged and Respondent has admitted that the Dale Road
facility and in particular the area where the 2,300-gallon tank of
-------
7
Askarel was stored was not covered by a Spill Prevention Control and
Counter-measure (SPCC) Plan as required by 40 CFR 761.42 (1980).
This admission included the fact that the PCBs in the mentioned tank
were stored for disposal. Mr. Gabel, however, testified that Respondent
had available equipment such as absorbent materials, shovels, .brooms,
etc. and a number of personnel who were trained to clean-up drips,
and spills resulting from hose separations, etc., so that everyone
knew how to react to such events (Tr. 134).
10. Completing their inspection at Dale Road, Dr. Gevirtz and Ms. Dalton,
accompanied by Mr. Darby, proceeded to Respondent's Seneca Street
facility. They counted sixty two SB-gallon drums of PCBs (42 in one
area and 20 in the other) stored for disposal in two separate areas
(Tr. 22, 31, 32, 71). The drums were stacked two levels high, one
drum on top of another (Tr. 70). PCB .marks were visible-on most of
the drums (Tr. 23, 69, 72, photos, Govt. Exhs 8 and 9). Because of
the manner in which the drums were stored, however, it was not
possible to observe PCB marks on each drum. The areas where the
drums were stored were not marked with the PCB mark (Tr. 32, 72).
Although Count IV of the complaint alleges that the drums at Seneca
Street were not marked with the PCB mark, the complaint was amended
to refer to the area as unmarked rather than the drums (Tr. 11).
11. At the time of the inspection, Respondent was in the process of con-
structing metal trays in which pallets upon which the drums were
stacked would be placed in order to comply with the diking or curbing
i*
requirements for storage of PCBs specified by 40 CFR 761.42 (1980)
-------
8
(Tr. 81; memoranda, drawing, work and purchase orders, Tab B of
Respondent's Exh 1). A completed tray is shown on photographs
taken at the Seneca Street facility at the time of the inspection
(Govt's. Exhs 8 and 9). Although Dr. Gevirtz was critical of this
method of complying with the requirements for curbing upon the
ground that leakage from a drum in the top tier might extend beyond
the perimeters of the tray, he acknowleged that the trays met the
minimum requirements of the regulation (Tr. 28, 30, 83, 85).
12. Two days after the inspection, Mr. Gabel sent a letter to Dr. Gevirtz
enclosing annual documents for the period July 1 to December 31,
1978, and for the year 1979 (letter dated October 24, 1980,
Respondent's Exh 1). It was pointed out that the annual document
for the year 1979 had been misfiled, but had since been located.
The annual documents were originally handwritten, but had since
been typed so that they would be easier to read. The letter stated
that all drums at 1600 Seneca Street had been placed in metal trays,
checked for leaks, PCB labels and dates and that the storage area
had been marked with a PCB label.
13. In telephone conversations on December 18, 1980, Dr. Gevirtz
informed Mr. Gabel that he (Gabel) had been mistaken in showing
just the weight of PCBs rather than total weight of materials
including PCBs on the annual documents (Tr. 50, 118; memo dated
12/18/80, Tab A, Respondent's Exh 1). Respondent had apparently
estimated the weight of PCBs in drums containing PCB debris (rags,
-<*
contaminated clothing, sawdust, etc.) and reported only that
-------
figure.!/ As to liquids, Respondent had apparently analyzed
samples of Askarel or relied upon analyses showing Askarel contained
Aroclor at a concentration of 700,000 ppm and reported only the
weight of Aroclor. Mr. Gabel relied upon a note in the regulation,
which he considered authorized that method of reporting..§/ Neither
the letter of October 24, 1980 nor the annual documents, however,
included any data as to volumes of PCBs in the containers nor any
assumptions as to the density of PCBs, which are a prerequisite for
application of the note. While it is not clear that these assumptions
were among data, copies of which were furnished to Dr. Gevirtz on
"
October 22, 1980, density of PCBs was among data in Mr. Gabel's
f i 1 e.
14. Mr. Gabel had available data from which the weights of PCBs could be
i^.
calculated and by letter, dated January 9, 1981, submitted revised
.§/ If it be assumed that a typical drum of PCB debris (rags, clothing,
sawdust, etc.) weighs 65 kg (finding 14, infra), annual documents show
three drums of such- material were in storage at the Seneca Street facility
on December 31, 1978, two drums on December 31, 1979 and four drums in
storage on December 31, 1980. These numbers are consistent with the
inventory record (Respondent's Exh 22), and do not support the thought that
only the estimated weight of PCBs in such materials was initially reported.
LI Tr. 118, 141-42. The note referred to (40 CFR 761.45 (1980), 44
FR No. 106, May 31, 1979 at 31557) provides:
. *
"Note: Any requirements for weights in kilograms of PCBs
may be calculated values if the internal volume of
containers and transformers is known and included in the
reports, together with any assumptions on the density of
the PCBs contained in the containers or transformers."
-------
10
annual documents containing recalculated weights (Tab A, Respondent's
Exh 1; Tr. 118; inventory record, Respondent's Exh 22). As indicated
(finding 6), the inventory record contains data as to known and
assumed concentrations of PCBs. These data, however, were not contained
in the letter or the annual documents. The letter stated that it was
assumed that each 55-gallon drum of liquid PCS contained 54 gallons,
rather than 52 gallons as in the initial documents, unless the exact
content was known, and that recalculated weights were based on the more
commonly accepted value for Askarel of 5.875 kg/gal rather than 5.67
kg/gal used previously. Because of the necessity or desirability of
allowing for expansion due to increases in temperature, a 55-gallon
drum is not normally filled with 55 gallons (Tr. 120). A drum
containing PCB debris (rags, contaminated protective clothing, sawdust,
etc.) was weighed at 65 kg net and this weight was assumed to apply to
all drums containing solids. The revised annual documents revealed
the presence of four drained, in-service (not-slated-for-disposal)
transformers, which were not shown on the initial documents. The
letter further stated the tank at Dale Road had been emptied and found
to containing less Askarel than shown on inventory records and that
inventory figures had been adjusted to show correct weights. Although
-------
11
Dr. Gevirtz considered that exact quantities of PCBs in gallons should
have been furnished, he did not contact Mr. Gabel because he assumed
that all information available had been supplied (Tr. 52).
15. The purpose of the requirement for annual documents is so that a
person or firm handling PCBs will have records to enable it to keep
track of PCBs and to enable EPA to more readily monitor compliance
with the regulations (Tr. 34, 35).
16. The complaint, issued on August 7, 1981, charged Respondent with
five violations of the Act and regulations. Count I alleged that
Respondent on October 22, 1980, stored PCBs at the Dale Road facility
without an SPCC Plan as required by 40 CFR 761.42, Count II alleged
that Respondent stored sixty two 55-gallon drums of PCBs at the Seneca
Street facility in an undiked or uncurbed area in violation of 40 CFR
761.42(b), Counts III and IV alleged that the areas at tale Road and
Seneca Street where PCBs were stored did not have the PCB mark as
required by 40 CFR 761.20 and Count V charged Respondent with failure
to prepare and maintain an annual document showing inventory and
disposal of PCBs as required by 40 CFR 761.45. Penalties of $15,000
each were proposed for Counts I and II, $5,000 each for Counts III
and IV and $10,000 for Count V for a total of $50,000. Respondent
has not contended that the amount of the proposed penalty would
adversely effect its ability to remain in business.
-------
12
Conclusions.
1. Respondent's action on October 22, 1980, in storing for disposal
approximately 1,500 gallons of PCBs at its Dale Road facility without
having in effect a Spill Prevention Control and Countermesures (SPCC)
Plan constitutes a violation of 40 CFR 761.42(c) (7) (i i) (1980) and
of section 15 (15 U.S.C. 2614) of the Act.
2. Respondent's action on October 22, 1980, in storing for disposal 62
55-gallon drums of PCBs at its Seneca Street facility in an undiked
or uncurbed area constitutes a violation of 40 CFR 761.42(b) (1 )(ii)
(1980) and of section 15 of the Act.
3. Respondent's action on October 22, 1980, in storing for disposal PCBs
in areas not marked with the PCB mark at its Dale Road and Seneca
Street facilities constitute violations of 40 CFR 761.42(c)(3) (1980)
-i ".
and of section 15 of the Act.
4. Although Respondent on October 22, 1980, had .what purported to be annual
documents for the period ending December 31, 1978 and for the calendar
year 1979, these documents were incomplete in that they contained
estimated net weights of PCBs rather than total weight of PCBs and
PCB items and articles in containers as required by 40 CFR 761.45(a)(l)
and (3) and (b)(3) (1980). These documents were also incomplete in
failing to show a shipment of 634 kg of PCB liquid shipped from Dale
Road to Seneca Street on September 11, 1979 as required by 761.45(b)(4)
and the presence of four PCB transformers, which although drained, were
slated fgr future use rather than disposal (761.45(a)(1)(ii)). Even
-------
13
If the revised documents submitted under date of January. 9, 1981, be
regarded as complying with the regulation, the document for calendar
year 1979 was required to be available not later than July 1, 1980
and thus Respondent was not in compliance with 40 CFR 761.45(a).
5. For the above violations of the regulations and Act, Respondent is
liable for a civil penalty in accordance with section 16(a) of the Act
(15 U.S.C. 2615(a)).
Discussion
While in its answer, Respondent denied Counts III, IV and V, the only
violation seriously disputed factually is Count V. This count alleges that
Respondent failed to prepare and maintain annual documents for the period
ending December 31, 1978 and for the calendar year 1979 as required by
' M
40 CFR 761.45 (1980). Respondent points out that the regulation does not
require that the data be in any particular form or format and asserts
that Respondent had all the raw data, maintained the data in annual
documents, delivered the data to EPA inspectors, recalculated the weights
and submitted revised annual documents when requested to do so (Proposed
Findings and Conclusions, dated July 1, 1983, at 9, 10). Respondent argues
that the mere fact that a different system of computation might be more
accurate, should not be sufficient to constitute a violation of the
regulation requiring an annual document. It points out that Dr. Gevirtz
made no effort to contact Respondent after receipt of the revised annual
documents and that it was reasonable for Respondent to assume that it had
*
submitted a satisfactory report. These arguments are wide of the mark,
-------
14
because it is not merely that a different system of computation might be
more accurate, but what the regulation reasonably construed requires.
Moreover, Dr. Gevirtz's reason for not calling Mr. Gabel was that he
assumed that all available information had been furnished.
The purpose of an annual document is to enable a person or firm to
keep track of PCBs and to enable EPA to readily monitor compliance with
the regulations (finding 15). Obviously, annual documents incomplete as
to quantities of PCBs and PCB contaminated materials cannot effectively
serve this purpose.
Mr. Gabel apparently interpreted the note at 40 CFR 761.45(b)(4)
(1980) (note 6, supra) as allowing the reporting of only estimated net
or calculated weights of PCBs rather than the total weight of PCBs and
PCB items, articles, etc. The note refers only to PCBs rather than PCB
items, articles, etc., and cannot properly be so interpreted;- Dr. Gevirtz
informed Mr. Gabel in the first telephone conversation that Respondent
was supposed to actually weigh each drum without regard to the note and
in the second telephone conversation that the note apparently applied
only to mixtures containing low levels of PCBs where it could be assumed
that the weight of the oil and the weight of the mixture including PCBs
would not significantly differ. There is no warrant for the latter
restrictive interpretation of the note. Complainant asserts flatly that
the revised annual documents submitted on January 9, 1981, were incomplete,
because Respondent had not weighed each drum containing PCBs (Opening
Brief at 18). Respondent weighed one drum of PCB debris or solids
and applied that weight to each drum containing similar material and
Complainant is correct that each drum of PCB solids should have been
weighed. The note, however, allows the use of calculated weights for
-------
15
liquid PCBs, if internal volumes of containers are knownZ/ and included
in the reports together with any assumptions as to density of PCBs in
the containers. An obvious purpose of the note is to preclude the
necessity of weighing each container of liquid PCBs. The size of the
drums and assumed volumes were provided in the letter of January 9,
1981. It has been found (finding 6) that known and assumed densities
of PCBs were among data available to Dr. Gevirtz at the time of the
inspection on October 22, 1980. While deficient in that exact quantities
of PCBs in gallons were not stated, it is concluded that the revised
annual documents furnished under date of January 9, 1981, substantially
complied with the regulation requiring such documents.
Penalty
'r '-^-
Section 16(a) of the Act provides in pertinent part:
"(2)(B) In determining the amount of a civil penalty,
the Administrator shall take into account the nature,
circumstances, extent, and gravity of the violation or
violations and, with respect to the violator, ability
to pay, effect on ability to continue to do business,
any history of prior such violations, the degree of
culpability, and such other matters as justice may
require."
EPA published guidelines for the assessment of civil penalties
under the Act on September 10, 1980 (45 FR No. 177 at 59770, et seq.).
The guidelines establish a gravity based penalty dependent on the
probability and extent of potential damage. Probability is categorized
as high, mid or low range (circumstance levels), while extent of potential
damage is characterized as major, significant or minor (45 FR at 59777).
2J Dr. Gevirtz testified that assumptions as to the specific
gravity (parts PCBs per million) of Askarel could be made and this
specific gravity applied to calculate weights in kilograms, if the
exact number of gallons was known (Tr. 53). This is a proper
interpretation of the note.
-------
16
A major violation in the high range of probability (Circumstance Level 1)
calls for the maximum penalty for a single violation of $25,000, while a
major violation in the low range of probability (Circumstance Level 6)
calls for a penalty of $2,000. Violations of the regulations are
classified into eight categories, the instant ones relating to storage,
marking and recordkeeping and three of which were classified as major
because of the quantities (in excess of 1100 gallons) and concentrations
of PCBs (in excess of 100,000 ppm involved).
Major storage violations are categorized as Circumstance Level 3 and
the lack of a SPCC Plan at the Dale Road facility resulted in a proposed
penalty of $15,000 under Count I of* the complaint. The lack of diking
or curbing at the Seneca Street facility was also a Circumstance Level 3
violation, again resulting in a proposed penalty of $15,000. The marking
\
violations (Counts III and IV of the complaint) were placed in Circumstance
Level 5 (minor marking violations)^/ and a $5,000 penalty proposed for
each count. Failure to have annual documents was placed in Circumstance
Level 4 (a major record-keeping violation) and a $10,000 penalty proposed.
Although the ALJ is required by the Rules of Practice (40 CFR 22.27(b))
to consider the guidelines in determining the amount of the penalty, he
.§/ This was in accordance with the penalty policy describing as
minor marking violations:
"Low Range
Level five:
(3) Minor marking violations. These are situations
in which all the requirements of the rule have not
been followed, but there are sufficient indications
to notify someone unfamiliar with the situation that
PCBs are present and enable them to identify PCB
items. An example would be the failure to mark a
transport vehicle containing PCB items which are
themselves marked" (45 FR at 59780).
-------
17
is not bound thereby. For the reasons hereinafter appearing, it is
concluded that strict application of the guidelines in this instance does
not provide the basis for an appropriate penalty.
Respondent contends that the evidence establishes its good faith in
attempting to comply with PCB regulations, while Complainant asserts that
the evidence demonstrates the opposite. Mr. Gabel, who is a graduate of
MIT and a registered professional engineer, testified that in an effort to
keep up with PCB regulations he checked the index of the Federal Register
on a daily basis and read any portions he considered pertinent (Tr. 108-09),
He also read literature concerning PCB regulations in various technical
magazines and publications including information published by'the National
Electrical Manufacturer's Association of which Respondent is a member.
He maintained a file of Federal Register and other information pertaining
»* ~.
to PCBs, sending copies of various materials and notes and comments
thereon to Mr. Darby (Tr. 156).
From the foregoing evidence, Complainant argues that Mr. Gabel was
well informed concerning the requirements of the PCB regulations and the
penalties for noncompliance (Brief at 20). Complainant emphasizes that
Mr. Gabel was a registered professional engineer and points out that
Mr. Darby was an experienced and sophisticated businessman, having been
an executive with RCA for 16 years prior to assuming the presidency of
Respondent. Complainant further emphasizes that Mr. Darby was kept
informed of the requirements of PCB regulations by Mr. Gabel (Id. at 22).
-------
18
Complainant says that these executives clearly did not translate their
knowledge of PCB regulations into action [necessary for compliance].
Respondent on the other hand asserts that Mr. Gabel and Mr. Darby
were open, honest and cooperative with the inspectors, spending as much
time with them as necessary, allowing them access to available records
and to the plant, permitting photos to be taken and furnishing the inspectors
with copies of requested documents (Proposed Findings at 14). Respondent
also points out that additional documents were mailed to EPA within two
days of the inspection and that Respondent had available inventory data
enabling it to keep track of PCBs and to furnish reasonably complete
annual documents when the necessity, therefor was called to its attention.
Mr. Darby testified that the drums of PCBs at Seneca Street were
inspected on a daily basis and that movement in the area where the drums
were stored was discouraged (Tr. 164, 175). This testimony is cited to
buttress the contention Respondent acted in good faith. Respondent also
cites Mr. Gabel's testimony to the effect that over a two-year period
beginning in 1978 he made several telephonic inquiries of EPA to ascertain
if there was an approved facility to incinerate PCBs of over 500 ppm, the
answer being that it would be another few months before such a facility was
available as only trial "burns" were being conducted at the time..?/
Complainant seems to be of the view that the violations border on
wilful ness, which appears to be based on the assumption that Mr. Gabel
was thoroughly familiar, if not expert, with regard to the PCB regulations.
The evidence does not establish that this is so and it is concluded that
i«
Respondent's position that the evidence demonstrates its good faith must
I/ Tr. 135-40. Although Dr. Gevirtz testified that facilities to
incinerate high concentrations of PCBs in El Dorado, Arkansas and Deer
Park, Texas had been approved (Tr. 179-80), no such facilities were
available at the time of the inspection on October 22, 1980, the approvals
not being forthcoming until 1981.
-------
19
be accepted.!*V Although Mr. Gabel made commendable efforts to
familiarize himself with and to keep abreast of changes to PCB regulations,
he misinterpreted the note at 40 CFR 761.45(b)(4) (1980) as authorizing
the recording of estimated net weights of PCBs in annual documents rather
than total weights including PCB contaminated materials. This, of course,
is not to excuse any violation, but merely to demonstrate that Mr. Gabel's
understanding of the regulations was less than profound. This fact
together with the further fact that in none of the violations charged
does it appear that Respondent totally ignored the requirements of the
regulation!!/ and Respondent's prompt corrective action amply establish
Respondent's good faith.ll/
*
Respondent's position is that because of the location of the tank
containing PCBs at Dale Road and the availability of personnel and
1Q/ Although troubling from the standpoint of Respondent's compliance,
the disclosure in the annual document for 1980 of the receipt on December 4,
1980, of a test report showing a concentration of 2600 ppm PCBs in a 3,000-
gallon tank of used mineral oil previously thought to be uncontaminated
(finding 8) strengthens rather than detracts from this conclusion. This is
because Respondent had no obligation to have the annual document for 1980
available until July 1, 1981 and no obligation to submit that information
to EPA. In this connection, Respondent asserts that Mr. Rebel's testimony
(Tr. 151) to the effect that repaired transformers were some times filled
with oil from this tank was mistaken and has stated that it is prepared to
move to reopen the record and to submit affidavits from Mr. Gabel or other
employees that oil from this tank was not used in other transformers (Reply
Brief at 13, 14).
.!!/ It is recognized that a possible exception is the lack of a
SPCC Plan at Dale Road. The area where the tank containing PCBs was stored,
however, 'had far higher diking than the regulations required on three sides,
which together with available equipment and personnel, made it likely that
all but catastrophic spills would be contained.
' Good faith is relevant because among factors which the
statute requires be considered in determining the amount of penalty is
"degree of culpability." Culpable suggests less stringent blame than
guilty and connotes malfeasance or errors of omission, negligence or
ignorance. Webster's Third New International Dictionary (1967).
-------
20
equipment for clean-up of spills, contamination of the area was unlikely
(Proposed Findings at 3). See note 11, supra. Complainant disputes this
position upon the ground that it ignores the fact the floor of the well
area was at grade level and that there was no barrier to the rear or
fourth side. (Reply Brief at 3). It is concluded, however, that the
substantial diking on three sides would assist immeasurably in the
containment of all but catastrophic spills. Complainant appears to
agree for it asserts that any spill of 1500 gallons of PCB fluid in the
tank would flow unrestricted out the back door (Id.). Because activity
in handling PCBs at Dale Road had essentially stopped (repair of PCB
transformers having been discontinued in 1979), a spill of such a magni-
tude was unlikely. Because of this circumstance and Respondent's good
faith, an appropriate penalty for the lack of a SPCC Plan at Dale Road
is considered to be $7,500.
Respondent was in the process of constructing trays in which to
store the drums of PCBs at Seneca Street at the time of the inspection
on October 22, i960. These trays undisputably complied with the
requirements of the regulation (40 CFR 761.42(b) (1) (ii)) (1980) and
Complainant's contention that Respondent should have done more to protect
against the possibility of leaks from drums in the second tier has no
support in the regulations and no place in determining an appropriate
penalty. Although Complainant asserts that the drums were stored in an
undiked area for three years, the disposal and marking regulation was
only effective as of April 18, 1978 (43 FR No. 34, February 17, 1978, at
7150, et seq.) and it is clear that prompt corrective action was taken,
Respondent's letter of October 24, 1980, reporting that the process of
-------
21
placing drums in trays had been completed. Under all the circumstances,
an appropriate penalty for this violation is considered to be $7,500.
Regarding the marking violations (Counts III and IV of the complaint,
Respondent argues that the PCB marks on the three tanks in the well area
at Dale Road and the PCB marks on the drums at Seneca Street serve the
same purpose and therefore constitute essential compliance with the marking
requirements of 40 CFR 761.20 (1980) (Proposed Findings at 3). It is, of
course, clear that the requirement for marking areas where PCBs are stored
is separate from the requirement for marking PCB containers, the regulation
(40 CFR 761.20(a)) (1980) providing in pertinent part: "Each of the
following items in existence on or after July 1, 1978, shall be marked
* * * (10) Each storage area used to store PCBs and PCB items for disposal."
It is also clear that one of the purposes of the marking requirement is to
\ ^.
warn individuals entering or approaching a PCB storage area of the presence
of hazardous materials and of the necessity to exercise caution. Accordingly,
the more conspicuous the PCB marks are, the more likely it is that their
warning purpose would be served. The regulation, however, does not require
that a PCB storage area be marked in any particular manner and Complainant's
argument (Brief at 15), that a PCB mark should have been placed on the
outside of the door leading to the well area at Dale Road and that a
second mark should have been placed on a stanchion adjacent to the well
area inside the building ignores the "or" in Dr. Gevirtz's testimony describing
possible alternative methods of complying with the area marking requirement
(Tr. 21, 22).^
In support of its position that area markings would have added little
to the usefulness of existing labels as warnings, Respondent has introduced a
-------
22
photo (Exh 17) showing the area where the drums were stored at Seneca
Street marked with PCB labels affixed to boards or pieces of cardboard
suspended by wires from the ceiling or overhead supports, while another
photo (Exh 18) shows the same area without the labels. Dr. Gevirtz
testified that Respondent's photos (Exhs 11 through 14 at Dale Road and
15 through 18 at Seneca Street) did not depict the reality of the
situation [with regard to visibility of the labels] at the time of the
inspection because the areas in the photos were more neat, the drums were
stacked in a more orderly manner with PCB labels facing one direction and
the lighting was far better (Tr. 61, 62, 73, 74). Accepting this testimony
as accurate, it nevertheless appeals that Respondent's position has a
substantial basis in fact.ll/ Under all of the circumstances, an
appropriate penalty for each of the marking violations is considered to
be $1,000 for Count III and $1,000 for Count IV. ':-'
Regarding Count V, failure to have annual documents, it is clear that
Complainant is literally correct. Even if the failure to locate the document
for 1979 at the time of the inspection on Octobe 22, 1980, is excused, the
annual documents submitted under date of October 24 contained only estimated
net quantities including PCB contaminated materials, failed to include a
shipment of PCBs from Dale Road to Seneca Street and failed to mention the
presence of four drained PCB transformers slated for future use. The first
deficiency resulted from Mr. Gabel's misinterpretation of the note at
1 Complainant emphasizes Mr. Darby's testimony that because the
pit area at Dale Road was used for painting of transformers and other
activities, it was possible for the labels on the tanks to be covered
by overspray from the paint from time to time (Tr. 171-72). It is clear,
however, that this was not the situation at the time of inspection, there
is no indication of the frequency of such happenings, if they in fact
occurred, and this appears contrary to testimony of Messrs. Gabel and Darby
(finding 7) that tanks and labels in the photos (Respondent's Exhs 11
through 14) looked the same on October 22, 1980.
-------
23
40 CFR 761.45(b)(4) (1980) and is clearly the more serious. It is
concluded that the shipment of PCBs was reflected in the inventory at
Seneca Street, there being no evidence to the contrary and the failure
to mention four transformers, which had been drained of PCBs, is certainly
a marginal omission. Although the revised annual documents contained
assumed rather than actual volumes of PCBs, it has been determined that
assumed and known data on PCB densities were available to Dr. Gevirtz
and that the revised annual documents substantially complied with the
regulation. It is concluded that Respondent had available records
enabling it to reasonably keep track of PCBs and thus one of the purposes
of annual documents (finding 15) was. served. Under all of the circumstances,
an appropriate penalty for the failure to have complete annual documents
is considered to be $4,000.
It is concluded that an appropriate total penalty for the violations
herein found is $21,000.M/ The purpose of a penalty is to deter further
or future violations and it is considered that this sum will adequately
achieve that purpose under the circumstances prevailing herein.
_11/ Although the penalty guidelines have been determined to be
inapplicable, it is noted that adjustments of up to 40% from the gravity
based penalty are authorized (up to 15% for attitude of the violator and
up to 25% for borderline situations separating minor and significant
violations) (45 FR at 59773 and 59776). It is also noted that an
essentially equivalent result would be reached by adopting Respondent's
contention (Proposed Findings at 12) to the effect that if they are
violations at all, the first four counts of the complaint should be
treated as Level 5 (minor storage and marking violations), because any
spilled material would be substantially contained, damage would be
relatively smaJl and markings were sufficient to alert anyone approaching
the area of the presence of PCBs. Respondent contends that Count V
should be treated as a Level 6 violation, because it is a minor
record-keeping violation which does not seriously impair EPA's enforcement
efforts. Respondent also contends that all violations should be placed
in the minor extent category, which would, of course, reduce the penalty
to approximately 10% of that determined here.
-------
24
Conclusion!!*/
For the violations of section 15 of the Toxic Substances Control Act
(15 U.S.C. 2614) and regulations herein found, a penalty of $21,000 is
assessed against Respondent Niagara Transformer Corporation, pursuant to
section 16 of the Act. Respondent is ordered to pay the same by submitting
a certified or cashiers check to the Regional Hearing Clerk in the amount
of $21,000 payable to the1Treasurer of the United States within 60 days
after receipt of this order.
Dated this 22nd day of September 1983.
Spencer T. Nissen
Administrative Law Judge
15 Unless appealed in accordance with 40 CFR 22.30 or unless the
Administrator elects to review the same sua sponte as therein provided,
this decision will become the final order of the Administrator in
'accordance with 40 CFR 22.27(c).
-------
25
-------
\ BEFORE THE ADMINISTRATOR -
U.S. E\VI RON-MENTAL PROTECT ION AC ENCY
WASHINGTON, D.C.
In the Matter of:
Bell & Howell Company,
A Delaware Corporation
TSCA-V-C-033, 034, 035
FINAL DECISION
Complainant, U.S. Environmental Protection Agency, Re-
gion V, Chicago, Illinois, appeals an initial decision of
Administrative Law Judge Gerald Harwood, decided February
3, 1983, in w>.ich civil penalties in the total amount of
$12,750 were assessed against Respondent, Bell & Howell
Company, for violating regulations issued under section 6(e)
of the Toxic Substances Control Act ("TSCA"), 15 U.S.C. 2615.
Complainant's appeal is restricted to contesting the amount
of the penalty assessed against Respondent. Complainant con-
tends that the full penalty it proposed, namely, $31,000,
should have been assessed against Respondent, and that the
presiding officer erred when he reduced the penalty to $12,750.
In response, Respondent argues that the ALJ failed to give full
consideration to substantial mitigating factors and that no
penalty should have been imposed. Respondent did not, however,
take an appeal from the initial decision. Consequently, this
decision only addresses matters falling within the scope of
Complainant's appeal.
-------
This proceeding began when Complainant filed three
separate complaints against Respondent in which it was alleged
that Respondent had violated the regulations establishing
recordkeeping and marking requirements for owners of trans-
formers and certain capacitors containing polychlorinated bi-
phenyls (PCBs). 40 CFR Part 761 (19RO). Each complaint relates
to a separate facility owned and operated by Respondent in
Chicago, Illinois, referred to, respectively, as Lincolnwood.
North (Docket No. TSCA-V-C-035), Hibbard (Docket No. TSCA-VC-034) ,
and Lincolnwood South (Docket No. TSCA-V-C-033). Complainant
alleged violations of the recordkeeping requirements at all three
facilities and proposed civil penalties in the following amounts:
Lincolnwood North ($10,000), Hibbard ($10,000) and Lincolnwood
South ($1,000), for a total of $21,000. The presiding officer
reduced these by 75 percent Lincolnwood North ($2,500),
Hibbard ($2,500) and Lincolnwood South ($250), for a total of
$5,250. Complainant also alleged a violation of the marking
requirements (failure to display approved warning labels) at
Lincolnwood South, and proposed a penalty of $10,000 for that
violation. The presiding officer reduced it by 25 percent to
$7,500. Thus, taken together, civil penalties in the total
amount of $31,000 were proposed by -Complainant, whereas the
amount actually assessed by the presiding officer was $12,750.
For the reasons stated below, the presiding officer's decision
is affirmed in part and modified in part.
-------
TSCA §16(a)(l) authorizes civil penalties in the amount of
$25,000 for each violation, and each day a violation continues
constitutes a separate violation. In determining the amount of
a civil penalty, TSCA §16(a)(2)(B) lists the following factors
that are to be taken into account:
[T}he nature, circumstances, extent, and
gravity of the violation or violations and,
with respect to the violator, ability to pay,
effect on ability to continue to do business,
any history of prior such violations, the de-
gree of culpability, and such other matters
as justice may require.
Th^ procedural rules governing this proceeding, 40 CFR
Part 22 ,1982), address the'question of setting the penalty
i/
amount in general terms, directing the presiding officer in
§22.27(b) to set the amount "in accordance with any criteria
set forth in the Act." In addition, the rules specifically
direct the presiding officer to "consider" any civil penalty
guidelines issued under the Act and, if he assesses a penalty
which is different from the one proposed in the complaint, to
give his reasons for the increase or decrease:
(b) Amount of civil penalty. If the Presiding
Officer determines that a.violation has occurred,
the Presiding Officer shall determine the dollar
amount of the recommended civil penalty to be asses-
sed in the initial decision in accordance with any
criteria set forth in the Act relating to the proper
amount of a civil penalty, and must consider any
civil penalty guidelines issued under the Act. If
the Presiding Officer decides to assess a penalty
JL/ The rules are of general applicability and apply to EPA
civil penalty proceedings under other statutes as well as TSCA.
-------
different from the amount of the penalty recom-
mended to be assessed in the complaint, the Pre-
siding Officer shall set forth in the initial
decision the specific reasons for the increase
or decreased (Emphasis added. ) 2_/
On September 10, 1980, general guidelines for the assess-
ment of civil penalties under TSCA were published in the
Federal Register, along, with a separate penalty policy document
establishing interim civil penalty guidelines for violations of
the PCB regulations. 45 Fed . Reg. 59770 et seq. These guide-
lines were used by Complainant in drafting the complaints here.
The purpose of the guidelines is:
[T]c assure that TSCA civil penalties [will]
be assessed in a fair, uniform, and consistent
manner; that the penalties are appropriate for the
violation committed; that economic incentives for
violating TSCA are eliminated; and that persons
will be deterred from committing TSCA violations. 3>/
To achieve this end, the guidelines establish a matrix for
determining the appropriate penalty. Along the horizontal axis,
violations are classified as major, significant, or minor in
terms of the "extent of potential damage" that might occur from
noncompliance; and along the vertical axis, violations are sepa-
rately classified according to the circumstances surrounding the
violation in an effort to gauge the "probability of damage,"
2/ 40 CFR §22.27(b)(1982).
3/ 45 Fed. Reg. 59770 (September 10, 1980).
-------
i.e., whether it is high, mid-range, or low. After a particu-
lar violation is classified in this manner, the appropriate
penalty is then found by referring to the matrix:
TABLE 1
Extent of potential damage
A B C
Major" Significant Minor
Circumstances (probability
of ciamac_, 2s) :
High range. ........... 1
2
4
6
$25 , 000
20,000
15, 000
10,000
5,000
2,000
$17 , 000
13,000
10,000
6,000
3,000
1,300
$5 000
3,000
1,500
1,000 .
500
200
Source: 45 Fed. Reg. 59777 (September 10, 1980)
For example, a violation which is classified as "signif-
icant.," in terms of the extent of potential damage, and as
"mid-range 3," in terms of probability of damage', calls
for the assessment of a proposed $10,000 civil penalty. The
guidelines provide detailed information on how to classify a
particular violation, and no effort will be made to repeat it
here. It is sufficient to note that the chief determinants
for establishing the extent of potential damage (horizontal
-------
axis) are the total weight and and concentration of the PCB
material(s) involved; and, in determining the probability of
damage (vertical axis), the chief determinants are the type of
violation involved and where it ranks in relationship to other
types of violations for example, under the guidelines, dis-
posal violations are ranked higher than recordkeeping violations.
The matrix does not purport to take into account all of
the statrtory factors which the Agency must consider under TSCA
§16(a)(2)(B); the matrix is intended to embrace only the "nature,
circumstinces, extent and gravity" of the violation. The remain-
ing statutory factors, i.e., culpability, history of prior
violations, ability to pay, effect on ability to continue in
business, and such other factors as justice may require, can be
considered in making adjustments to the amount arrived at through
use of the matrix. In this manner, the guidelines take into
account all of the statutory factors which must be considered
before a civil penalty is assessed.
Turning now to the specific matters raised on appeal. Com-
plainant's chief objections to the initial decision center on
the presiding officer's reduction of the recordkeeping penal^
ties. Complainant charged Respondent with not having an "annual
document" prepared for each of the three facilities in accordance
with 40 CFR §761.45(a)(1980), which, in pertinent part, provides:
-------
§761.45 Records and monitoring
(a) PCB's and PCS items in service or pro-
jected for disposal. Beginning July 2, 1978,
each owner or operator of a facility containing
at least 45 kilograms(99.4 pounds) of PCB chemical
substances or PCB mixtures contained in a PCB con-
tainer or PCB containers, or one or more PCB trans-
formers, or 50 or more PCB large high or low voltage
capacitors shall develop and maintain records on the
disposition of PCB's. These records shall form the
basis of an annual document prepared for each facil-
ity by July 1 covering the previous calendar year.
Owners or operators with one or more facilities which
contain PCB's in the quantities described above may
maintain the records and documents at one of the fa-
cilities which is normally manned for 8 hours a day,
provided the identity of this facility is available
at each facility containing PCB's that is normally
manned for 8 hours a day. The records and documents
sheill be maintained for at least five years after the
faci?.ity ceases containing PCB's in the prescribed
quantities. The following information for each fa-
cilJty shall be included in the annual document....
(Emphasis added.)
The information that must be included in the annual document is
identified in §761.45(a)(l)-(3). It includes (1) the dates
when PCBs are removed from service, placed in storage for
disposal, and transported for disposal, (2) the location and
identity of disposal or storage facilities for PCBs which are
removed from service, and (3) total quantities of PCBs by weight
and number remaining in service at the end of the calendar year.
From the foregoing, it can be seen that the information in
the annual document is a summary of PCB activity during the pre-
ceding calendar year. It is a permanent record that must be
maintained as long as PCBs are kept at a facility in the pre-
scribed quantities (and for five years after the facility no
longer contains PCBs in the prescribed quantities). The under-
-------
lying purpose of the recordkeeping requirements is to ensure
proper disposal of PCBs, so that further contamination of the
environment can be prevented. The annual document is an impor-
tant tool in achieving this goal because it provides a means of
tracing the disposition of PCBs, and it encourages account-
ability in persons having control over PCBs. As an aid to en-
forcing the Act, it is, therefore, invaluable. See generally
In re National Railroad Passenger Corporation (AMTRAK), 101 ALC
168 (TSCA Appeal No. 82-1, decided April 27, 1982); In re Briggs &
Stratton Corporation, 101 ALC 116, 118-119 (TSCA Appeal No. 81-1,
decided February 4, 1981).
When EPA inspected Respondent's facilities on September 5,
1980, Respondent had not prepared an annual document for its
PCBs for either 1978 or 1979, i.e. , the two years for which
annual documents were then due. In accordance with the penalty
guidelines. Complainant classified the annual document viola-
tions at Respondent's Lincolnwood North and Hibbard facilities
as "major" in extent and "mid-range 4" in probability of
damage, resulting in a proposed $10,000 penalty for each facil-
ity. There were 32 transformers at the Lincolnwood North facil-
ity, filled with 5,003 gallons of PCB dielectric fluid, and
five (5) transformers at the Hibbard facility, containing 1,195
gallons of the substance. .There was also one transformer at
Lincolnwood South, containing 187 gallons of PCB dielectric fluid.
Complainant classified the violation at the latter facility as
-------
"minor," and thus a penalty of $1,000 was proposed in the
complaint.
Complainant argues that there is no basis in the record
for adjusting the penalties downward from the amount proposed in
the complaints. Complainant points to the fact that the amount
of PCBs involved is large, but, more importantly, even though
Respondent has since prepared annual documents for 1980 and sub-
sequent years, Respondent has not yet prepared the required docu-
!/
meats for 1978 and 1979. Complainant argues that the documents
are still needed, that there is evidence in the record showing
that the total amount of PCB fluid and the number of transformers
may have changed in 1978 or 1979, and that its ability to en-
force the requirements of the Act are hampered by the absence of
the documents. Complainant further contends, with emphasis,
that penalties should not be reduced as a matter of Agency policy
when violations remain uncorrected:
[T]his Agency must not establish a precedent of
reducing the penalty before a company achieves
full regulatory compliance. To do otherwise would
.- undermine the U.S. EPA's ability to insist that- -
environmental laws be fully complied with. Indeed,
the explicit purpose of assessing a penalty is to
ensure compliance. This penalty fails to do this. S_l
In response, Respondent raises a number of points. Its
chief contention centers on a continuing objection, voiced
4_/ Respondent does not dispute this contention or otherwise
argue that it is not pertinent to the penalty determination.
Instead, Respondent simply asserts, without any documentary
support, that "the status of [its] PCB items at the end of
1978 and 1979 was substantially the same as at the end of
1980 and 1981." B&H App. Br. at 26.
]>/ EPA App. Br. at 9.
-------
10
throughout the proceeding, to having the presiding officer give
any consideration whatsoever to the penalty guidelines. Respond-
ent argues that the Agency, by requiring the presiding officer to
consider the "Agency's views on penalties as established in its
role as prosecutor, created a situation whereby it was imposs-
ible for the presiding officer to be fair and impartial towards
6/
Respondent." B&H App. Br. at 2. Secondly, Respondent
£/ By motion dated October 20, 1981, Respondent asked that the
presiding officer be disquali-fied for the stated reason that
the regulations required the presiding officer to consider the
penalty guidelines. Respondent asserted that this requirement
prevented a fair and impartial hearing. Respondent further
asserted that to obtain a fair and impartial hearing, it was neces-
sary for the presiding officer to be replaced and that his replace-
ment be -.nstructed to disregard the requirement of the regulations.
This motion lacks merit and is denied. Among other things, Re-
spondent did not give any reasons in its motion to explain how the
presiding officer's consideration of the penalty guidelines denied
it due process. In its brief on appeal. Respondent supplies some
clues in that regard, but the reasons given are unconvincing. Re-
spondent argues that the presiding officer's consideration of the
guidelines would be the same as a prosecutor arguing in federal
court, in a criminal case, that the court is bound by the prosecu-
tor's recommendation for a fine (or the court would have to explain
the reasons for not adopting the prosecutor's recommendation). Such
a comparison is inapposite. Among other things, it fails to recog-
nize that the penalty guidelines constitute an interpretation of
the statutory factors set forth in TSCA §16(a)(2)(B) and that the
Administrator, not the Complainant, has specifically directed the -
presiding officer in §22.27(b) of the procedural rules to give that
interpretation consideration. Therefore, since the presiding offi-
cer is obviously bound to apply the statutory factors, the Admini-
strator's direction to him to give consideration to a particular
interpretation, i.e^, the penalty guidelines, is the same, in terms
of its legal effect, as any other regulation the Administrator might
issue construing the statute; and, in that regard, the presiding
officer properly observed that the requirement to give the guidelines
consideration is "-entirely in accordance with the settled .rule that
agency policy statements interpreting a statute are entitled to be
given such weight as by their nature seems appropriate. [Citing
Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).3" I.D. at 9. Re-
spondent cites1 no authorities, judicial, administrative or otherwise,
which either directly support its contentions or refute the pre-
siding officer's holding. Even if there were merit to Respondent's
(Footnote No. 6 continued on p. 11).
-------
11
argues that the penalty imposed by the presiding officer is
excessive and does not reflect substantial mitigating factors.
The presiding officer disagreed with both the Complainant
and the Respondent. He concluded that there were a. number of
aggravating factors weighing against Respondent's contention
that it should not be assessed any penalty. However, he also
found that Complainant's estimate of the probable damage that
would result from the violations was too high, and, therefore,
he reduced the penalty proposed by Complainant. Since the pre-
siding officer's decision is not unreasonable insofar as it re-
jects Re-.ponder.t' s arguments for an additional reduction in the
penalty, and, furthermore, since Respondent, as previously stated,
did not appeal the presiding officer's decision, there is no need
to discuss that argument .any further. Similarly, there is no
compelling reason to address Respondent's contentions regarding
the effect of the guidelines on the presiding officer's ability
y
to render a fair and impartial decision.- Therefore, the
(Footnote No. 6 continued). -: ~ -~ ~ - -
contention, disqualification of the presiding officer would not be
necessary to correct any resulting unfairness. The presiding
officer is not a lay juror whose ability to be impartial is irrep-
arably damaged from having given previous consideration to highly
prejudicial material. The presiding officer is an experienced
Administrative Law Judge and, until shown otherwise, is presumptive-
ly able to disregard prejudicial material if instructed to do so.
Thus, the alleged unfairness could be cured short of disqualifying
the presiding officer, and, therefore, for that reason alone, the
motion is ill-conceived.
2.1 Ibid. Also, the presiding officer denied a motion filed by Re-
spondent asking the presiding officer to withdraw from the proceeding
because of the alleged prejudicial effect of the penalty guidelines.
-------
12
discussion below only addresses the presiding officer's conclu-
sion that Complainant's proposed penalty assessment was too high.
The presiding officer concluded that the Complainant over-
!/
estimated the probablity of damage (vertical axis). Specifi-
cally, he concluded that since the transformers were "in service,"
rather than in storage or otherwise not being used, damage was
less likely to result:
Complainant's proposed penalty of $21,000 for
the recordkeeping violations is based on an estimate
of probable damage which I believe is not justified
under the facts of this ca'se. [Footnote omitted.]
Here the transformers which accounted for the bulk
of the PCB's involved, were all in active service.
The recordkeeping requirement appears to be directed
mainjy toward insuring that PCB's will be disposed
of ir. accordance with the regulatory requirements, so
that the potential for harm is likely to be greatest
in situations where PCB's are being removed from ser-
vice, or stored and disposed of without the mainten-
ance of proper records. Here the gravity of the
offense lies not so much in the potential for harm as
in Respondent's neglect to carry out its responsibil-
ities under the PCB rule. ^/
Complainant argues that there is no basis for making a dis-
tinction based on the in-service or out-qf-service-status of the
/
transformers. In fact, Complainant even goes so far as to argue
that in-service transformers present a greater danger than out-
of-service transformers. According to Complainant, "PCB items
which are in-service clearly present a greater risk of rupturing
or leaking, and subsequently contaminating workers or the environ-
ment, than items in storage for disposal." EPA App. Br. at 12.
I disagree with this analysis. While in-service PCB items
(3/ See text at pages 3-6 for discussion of the penalty guidelines
9/ I.D. at 25.
-------
13
probably do present a greater danger of rupturing than out-of-
service items, it does not follow from that fact that the risk
to humans and the environment is necessarily greater. Out-of-
service items which go unreported may well be handled or disposed
of by persons who have no appreciation or concern for the hazards
posed by improperly handled PCBs. Indeed, it is probably safe
to assume that such items will be handled improperly, possibly to
the detriment of the environment or human health. Thus, I cannot
accept Co.nplainant's contention that'in-service items are in-
herently more harmful than outof-service items. At the same
time, ho.'ever, there is no basis in the record for concluding that
the converse is true, namely, that in-service items are, as a
general rule, inherently safer than out-of-service items. However,
I do not construe the presiding officer's decision as advocating
such a general rule. Instead, he merely held, based on the facts
of this particular case, that the probability of damage was less-
ened because of evidence tending to show'that Respondent followed
reasonable procedures for cleaning up spills and leaks. Specifi- . .
cally, the presiding officer found that:
The greatest risk of exposure would appear to be
small quantities of PCBs leaking from the trans-
formers. [Footnote omitted.] Respondent, also,
was not completely oblivious to the PCB rule re-
quirements. Since it had properly stored some PCB
cleanup materials, the possibility that it would
use the required care in cleaning up spills or
leaks or disposing of its transformers, cannot be
entirely dismissed. 10/
Accordingly, I find no error in the fact that the presiding
10/ Id. at 14.
-------
14
officer made a distinction between in-service and out-of-service
items in reducing the penalty proposed by Complainant. The dis-
tinction was based on the particular facts of this case and is
supported by the evidence in the record. Thus, were there
nothing else to consider here, I would affirm the decision out-
right; however, a modification is in order because of Respond-
ent's continuing failure to prepare annual documents for 1978
and 1979.
Complainant's position that penalty reductions should not
. ^- »
be made as long as an uncorrected violation is outstanding is
!!/
well founded ir. this case. There is no reason to believe that
Respondent is unable to bring its records into full compliance
by preparing annual documents for 1978 and 1979. Respondent pre-
pared an annual document for 1980 by obtaining the necessary in-
formation from routine corporate documents, specifically, asset
ledgers maintained for financial reporting purposes, and service
and operating manuals kept for maintenance purposes. Tr. 218-222.
These same information sources can be consulted, presumably, for
ll/ Although each case must be decided on the basis of its own par-
ticular facts and circumstances, the full amount properly imposed
under the penalty guidelines, through use of the matrix, should not
be reduced, ordinarily, if the violation remains uncorrected. Ob-
viously, if the violation is not susceptible to correction, imposi-
tion of the full penalty for noncompliance would be unjust if other
considerations warrant the reduction; imposition of the full penalty
in that instance would merely serve the. goal of punishment, without
regard to the basic objective of the civil penalty scheme, which is
to "to deter through regulation, not reprimand through punishment."
In re Briggs & Stratton Corporation, 101 ALC 116, 119 (TSCA Appeal
No. 81-1, decided February 4, 1981).
-------
15
12/
1978 and 1979.
Although the presiding officer acknowledges the fact that
the annual documents for 1978 and 1979 are still missing, it is
unclear how this fact affected his computation of the proper
penalty, if at all.- It is clear, however, that a failure to
achieve full compliance is a matter which can be considered under
TSCA §16(a)(2)(B), which, among other things, authorizes the
Agency to take into a account "such, other matters as justice may
require.1' Therefore, restoration of the full penalty for failing
to correct the violation is not precluded here. However, Respond-
ent should be given the opportunity to supply the missing docu-
ments before the full penalty is imposed. If the documents are
in fact furnished and prepared in a satisfactory manner, the
penalty will be reduced to the amount recommended by the pre-
siding officer. Accordingly, the full penalty proposed by Com-
plainant for the annual document violations, $21,000, is hereby
assessed against -Respondent; subject, however, to the condition
that the penalty shall be reduced to the amount assessed in the
initial decision, i.e., $5,250, if the reports are submitted as
hereinafter provided.
The second matter appealed by Complainant is the amount of
the penalty imposed by the presiding officer for Respondent's
12/ Respondent notes in its brief the ease with which it was able
to gather the necessary data from these sources: "[T3he bulk of
information required in an annual document was quickly supplied
from company records." B&H App. Br. at 26.
-------
16
marking violations. None of Respondent's PCB transformers bore
ll/
the required warning label. Instead, the only marking con-
sisted of the manufacturer's nameplate informing the reader of
the fact that the contents were Pyranol or Askarel, two common
tradenames for PCB dielectric fluid. The presiding officer
properly rejected Respondent's contention that these nameplates
mitigated the potential for harm:
Respondent in attempting to minimize the vio-
lations argues that since"the transformers had name-
plates indicating that they contained Pyranol or
Askarel, which are trade names for PCB dielectric
fluid, persons would be warned that the transformers
did contain PCBs. A similar argument was made in the
case of Briggs & Stratton Corp., TSCA Appeal No. 81-1,
(Pel: ruary 4,1981), and rejected by the Judicial Offi-
cer for the obvious reason that the manufacturer's
nameplate does not like the EPA-approved mark contain
instructions about the proper disposal of PCBs. Briggs^
& Stratton Corp., supra at 29. Nor does the nameplate
like the EPA-approved mark contain a clear and unmis-
takable warning that PCBs are a toxic environmental
contaminant requiring special handling so that all
persons Cnot just those who may have special knowledge
regarding the dangers of PCBs] who do come in contact
with leaks or spills from the transformers will not
only know that PCBs are present but they will act to
avoid any injury to themselves or to the environment. 14/
Nevertheless, the presiding officer reduced the penalty pro-
posed by Complainant by 25 percent, i.e., from $10,000 to $7,500.
13/ 40 CFR §761.20(a)(1980) requires an EPA-approved warning label
to be affixed to PCB transformers and containers. 40 CFR §761.44
(1980) prescribes the required format of the warning label and
contains minimum size limitations, color requirements, a "caution,
contains PCBs" notice, and directions to contact EPA for informa-
tion regarding proper dispo'sal.
14/ I.D. at 11-12.
-------
17
This was done because, in his estimate of the probability of
damage, the risks were primarily of small amounts of PCB's
leaking from the transformers. As previously indicated,
there was evidence showing that Respondent had followed proper
cleanup practices in the past, thus suggesting that the proba-
bility of harm in this instance was smaller than the absence of
li/
properly marked transformers would indicate. The. reduction
was only 25 percent because there we're no other compelling or
valid reasons for making further reductions, and the presiding
officer proper\y rejected Respondent's arguments to the contrary.
But for respondent's failure to achieve full regulatory
compliance (by not preparing annual documents for 1978 and 1979),
I would not raise the penalty assessment to $10,000 for the mark-
ing violations. The presiding officer's penalty reduction is
not otherwise of sufficient magnitude to call its validity into
serious question. A penalty of $10,000 was proposed by the
Complainant to reflect the "significant" nature of the violation
(horizontal axis) and its "mid-range3" characteristics in terms
of probability of damage (vertical axis). See matrix at page 5,
supra. The presiding officer, however, disagreed with Complain-
ant's estimate of the probability of damage and lowered the pro-
posed penalty to $7,500. .This lower amount does not represent a
fundamental departure from the penalties authorized by the penalty
15/ See text at pages 3-6 for a discussion of the penalty
guidelines.
-------
18
guidelines or from Complainant's characterization of the vio-
lation. This is made evident by the fact that lowering the
penalty by a single factor on the matrix for example, by
changing the probability estimate from "mid range3" to "mid
range4" would result in a reduction of the penalty from
$10,000 to $6,000. The presiding officer's lowering of the
penalty to $7,500, of course, falls short of this amount.
There is nothing in the guidelines which suggests that a
presiding officer is required to assess a penalty in an amount
which ir identical to one of the amounts shown in the matrix
for example, S^.0,000 or $6,000. The guidelines were never in-
tended to establish an inflexible policy which would force the
presiding officer to elect between one amount or the other, de-
pending upon which amount more closely approximated his estimate
of the probability of damage (vertical axis). Instead, it is
better to view the amounts shown in the matrix as points along a
continuum, representing convenient benchmarks for purposes of
proposing and, in some instances, assessing penalties. Accord~~
ingly, if warranted by the circumstances, other points along
the continuum may be selected in assessing a penalty. Although
the guidelines do not purport to give specific guidance on how
this should be done, it seems evident that, at a minimum, the
additional evidence adduced at a hearing can be used as a basis
for justifying deviations ("up or down) from the amounts shown
in the matrix. In other words, by viewing the amounts shown
-------
19
in the matrix as benchmarks along a continuum, a range of
penalties for example, between $10,000 and $6,000 becomes
available to account for, among other things, some of the less
tangible factors which the presiding officer is in a unique
position to evaluate. Moreover, the existence of this range
"constitutes tacit acknowledgment of the fact that, no matter how
desirable, mathematical precision in setting penalties is im-
possible. Consequently, I conclude 'that, at the very least, the
. -w.
presiding officer in reducing the proposed penalty from $10,000
to $7,500 was Corking within a range of penalties which is both
authorized by the guidelines and involves the exercise of a sub-
stantial amount of discretion. Accordingly, absent unusual or
other compelling circumstances, it would be inappropriate on
appeal to change the penalty if it falls within this range. Since
no such circumstances are presented here, I decline to substitute
my judgment for that of the presiding officer's. Nevertheless,
because of Respondent's failure to prepare annual documents for
1978 and 1979, the full penalty proposed by Complainant, $10,000,
will be assessed against Respondent; subject, however, to the
condition that the penalty will be reduced to the amount assessed
in the initial decision, i.e^, $7,500, if the reports are sub-
mitted as provided below.
-------
20
Conclusion
For the reasons stated, the presiding officer's decision is
16/
affirmed in part and modified in part. For the annual docu-
ment violations, a civil penalty in the total amount of $21,000
is assessed, consisting of $10,000 for violations occurring at
Respondent's Lincolnwood North facility, $10,000 for violations
at its Hibbard facility and $1,000 for violations at its Lincoln-
wood Souih facility. For the marking violations (failure to
V.
display approved warning labels), a civil penalty in the amount
of $10,COO is assessed. If Respondent submits to Complainant
completed annual documents for 1978 and 1979 for these facilities
within thirty. (30) days of service of this final decision, the
amounts above for the annual document violations shall be reduced,
respectively, for eacK submission, to the amounts assessed by the
presiding officer in his initial decision, i.e., Lincolnwood North
!!/
($2,500), Hibbard ($2,500) and Lincolnwood South (_$250).
Similarly, if Respondent submits completed annual documents for
1978 and 1979 for each of the facilities, the amount of the civil "
penalty for the marking violations shall be reduced to the amount
assessed by the presiding officer in his initial decision, i.e.,
$7,500. Payment of the civil penalties assessed against Respondent
16/ Respondent's request for oral argument is denied.
17/ Payment of the full penalty (for failing to submit the annual
documents on or before the deadline), rather than the reduced
amount, shall not relieve Respondent of responsibility for prepar-
ing the documents or otherwise preclude the Agency from taking
further enforcement action under the Act.
-------
21
shall be made within sixty (60) days of the service of this
final decision and shall be forwarded to the Regional Hearing
Clerk. Payment shall be by cashier's or certified check pay-
able to the United States of America.
So ordered.
Ronald L. McCallum
Judicial Officer (A-101)
Dated: Q£C 2 1983
-------
CERTIFICATE OF SERVICE
I certify that copies of the foregoing Final Decision in the
matter of Bell & Howell Company, TSCA-V-C-033, 034, 035, were sent
to the following persons in the manner indicated:
By certified mail,
return receipt requested;
By 1st class mail,
postage prepaid:
By hand delivery:
Louis M. Rundio, Jr., Esq.
McDermott, Will & Emery
111 West Monroe Street
Chicago, IL 60603
Craig Benedict, Esq.
U.S. Attorney's Office
P.O. Box 1258
Federal Building
Syracuse, NY 13201
Mary Langer
Regional Hearing Clerk
EPA, Region V
230 South Dearborn St.
Chicago, IL 60604
Robert Schaeffer, Esq.
Office of Regional Counsel
EPA, Region V
230 South Dearborn St.
Chicago, IL 60604
Honorable Gerald Harwood
Office of Administrative Law
Judges (A-110)
EPA Headquarters
401 M Street, S.W.
Washington, DC 20460
M. Gail Winqo
Secretary to the
Judicial Officer
Dated: DEC 2 1983
-------
26
-------
UNITED STATES ENVIRONMENTAL PROTECTION ARLHCY
BEFORE THE ADMINISTRATOR
/
c .
In the Matter of )
)
Rinco Casting Co., ) Docket No. TSCA-82-1089
Respondent )
1. Toxic Substances Control Act - PCBs - Owner of diecasting machines
using PCB hydraulic fluid found to have violated 40 C.F.R. 761.40(a)(7),
by not marking its machines, and to have violated 40 C.F.R. 761.20(a),
for its unauthorized use of PCBs in a manner other than in a totally
enclosed manner.
2. Toxic Substances Control Act - PCBs - In determining a violator's degree
of culpability with respect to the assessment of a penalty, the test is
not what the violator actually knew, but whether it should have known
of the relevant PCB requirements and their applicability to its
operations.
3. Toxic Substances Control Act - PCBs - Defense of lack of culpability
based on claim that owner of diecasting machines containing PCB fluid
did not know of the requirements of the PCB rule and that the fluid
contained PCBs rejected. Publication of the PCB Ban Rule in the Federal
Register Notice is sufficient notice to the affected public of the
requirements of the rule. Since the owner had been purchasing hydraulic
fluid over many years and did not know its chemical composition, it
should have tested the hydraulic fluid for its PCB content.
4. Toxic Substances Control Act - PCBs - Proposed penalty of $35,000 reduced
to $16,250, because of violator's promptness and thoroughness in elimina-
ing the hazards created by its PCB contaminated hydraulic machines, and
because it expended a substantial sum going beyond the requirements of
the rule in order to ensure that none of its diecasting machines contain
PCBs of 50 ppm or more.
Appearances:
George Ciampa, United States Environmental Protection
Agency, Region -I, Boston, Massachusetts, for Complainant,
Gregory L. Benik, Hinckley X Allen, 2200 Fleet National
Bank Building, Providence, Rhode Island, for Respondent.
-------
INITIAL DECISION
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
Section 16(a), 15 U.S.C. 2615(a), for the assessment of civil penalties
for violation of the rule promulgated under Section 6(e) of the Act, 15
i
U.S.C. 2605(e), governing the manufacturing, processing, distribution,
and use of polychlorinated biphenyls ("PCB Ban Rule"), 40 C.F.R. Part
I/
761. The complaint issued by the Regional Administrator of the United
States Environmental Protection Agency charged-Respondent, RIOCO Casting
Co., with failing to mark hydraulic systems using PCB hydraulic fluid,
as required by 40 C.F.R. 761.40(a)(7), and with the unauthorized use of
PCBs in a manner other than a totally enclosed manner in violation of 40
C.F.R. 761.20(a), since RIDCO did not test the hydraulic fluid in its
hydraulic systems for its PCB content as required by 40 C.F.R. 761.30(e)(1).
A penalty of $35,000 was requested, $15,000 for failure to mark, and $20,000
for using PCBs in a manner other than totally enclosed. RIDCO answered and
admitted that its hydraulic systems using PCB hydraulic fluid were not
marked in compliance with the PCB Ban Rule, and that it did not test the
]_/ Section 16(a) of the Act, 15 U.S.C. 2615(a), provides in pertinent
part, as follows:
(a) Civil. (1) Any person who violates a provision of section 15
shall be liable to the United States for a civil penalty in an amount
not to exceed $25,000 for each such violation. Each day such a violation
continues shall, for purposes of this subsection, constitute a separate
violation of section 15.
Section 15 of the Act, 15 U.S.C. 2614, provides in pertinent part, that
."it shall be unlawful for any person to (1) fail or refuse to comply
with . . . (B) any requirement prescribed by section . . . 6 [15 U.S.C.
2605], or (c) any rule promulgated under section ... 6 . ..."
-------
2
hydraulic fluid as required by the rule. It alleged, however, that the
violations were inadvertent, were done without knowledge, and that the
y
penalty was excessive. "
A hearing was held in Providence, Rhode Island on October 4, 1983. -
Thereafter, each party submitted proposed findings of fact, conclusions of
law, and a proposed order together with a supporting brief. On consideration
of the entire record and the briefs submitted by the parties, a penalty of
$16,250 is assessed. All proposed findings and conclusions inconsistent
with this decision are rejected.
Findings of Fact
1. RIDCO operates a custom zinc diecasting business in Pawtucket, Rhode
I/
Island. Complaint, Par. 1, and answer; Tr. 51.
2. In its fiscal year immediately prior to that in which the date April 28,
1982, occurred, RIDCO's gross sales (total business revenue from all operations)
exceeded $4 million. Complaint, Par. 2, and answer.
3. From 1970 to 1972, RIDCO purchased PCBs from Monsanto. Complaint,
Par. 4, and answer.
4. On April 28, 1982, RIDCO's facility was inspected by a duly designated
representative of the Administrator of the United States Environmental
Protection Agency ("EPA"), Donald K. Fulton. Mr. Fulton is a compliance
auditor for Versar, Inc. which is under contract with the EPA to do TSCA
2/ RIDCO also alleged that the definition of "totally enclosed
manner" in the PCB Ban Rule, 40 C.F.R. 761.3(hh), was in excess of
delegated congressional authority. That issue, however, may not be
considered in this proceeding. See the decision of the Judicial Officer
in The Dow Chemical Company, Docket No. TSCA (16(a))-l (July 28, 1982).
In its prehearing letter, RIDCO agreed that Dow precludes consideration
-of its claim that the rule is invalid in this enforcement proceeding,
but said that it was reserving its right to place on the record its position
as to the invalidity of the rule.
3/ "Tr." refers to the transcript of the hearing.
-------
inspections for the EPA. Complaint, Par.1 3, and answer; Conplainant's
Exhibit 2; Tr. 12.
5. Fulton found sixteen diecasting machines owned and operated by RIDCO.
Each of these machines had a hydraulic reservoir containing hydraulic
fluid used to operate the machine. Tr. 16.
6. The hydraulic fluid in eight of these diecasting machines contained
PCBs in excess of 50 parts per million (ppm). The PCB content ranged from
5,000 ppm to 270,000 ppm. Complaint, Par. 6, and answer; Complainant's Ex. 2.
7. The hydraulic fluid containing PCBs-was in use in RIDCO's diecasting
machines prior to November 1, 1979. Complaint, Par. 6, and answer.
8. The eight diecasting machines containing the PCB fluid were not marked
with the Targe PCB Mark ("ML") as required by the PCB Ban Rule, 40 C.F.R.
761.40(a)(7). Complaint, Par. 7, and answer.
9. RIDCO did not test the hydraulic fluid of each of the eight diecasting
machines containing the PCB fluid by November 1, 1979, and at least annually
thereafter, for the concentration of PCBs in said hydraulic fluid, as required
by 40 C.F.R. 761.30(e) (1). Complaint, Par. 8, and answer.
10. All of RIDCO's diecasting machines leak and this was known by RIDCO.
Tr. 91, 103.
11. The EPA inspector saw evidence of hydraulic fluid leaking from the eight
diecasting machines containing PCBs. The existence of leaks was disclosed
by the presence of oil on top of the machines and of fresh absorbent material
on the machines and on the floor beneath the machines. Tr. 22-24, 30,
34-37, 40-41; Complainant's Exhibit 2.
-------
12. On Kay 27, 1982, the EPA sent RIDCO a written notice of violation in-
forming RIDCO of the violations alleged in the complaint. Complaint, Par.
10 and answer; Complainant's Exhibit 4.
13. Upon being advised that the hydraulic fluid in the eight diecasting
machines contained PCBs in excess of 50 ppm, RIDCO immediately undertook to
test, drain and properly dispose of the PCB fluid. Tr. 58-60, 135-38.
14. In addition, RIDCO drained and disposed of the hydraulic fluid in a
ninth machine, which contained PCBs at a concentration of 48 ppm. Tr. 65.
Discussion and Conclusions
RinCO does not question the violations with which it is charged except
to assert that the EPA has not proved that RIDCO's diecasting machines were
operated in a manner other than totally enclosed. "Totally enclosed manner"
is defined as "any manner that will ensure that any exposure of human beings
or the environment to any concentration of PCBs will be insignificant; that
is, not measurable or detectable by any scientifically acceptable analytical
method." 40 C.F.R. 761.3(hh). RIDCO argues that the EPA's proof is de-
ficient since the EPA inspectors did not take samples of the fluid on top
of the machines or of the absorbent material in the immediate area of the
machines and test them for their PCR content. It is reasonable to infer,
however, that hydraulic fluid leaking from the machines accounted for the
presence of the fluid on the machines and underneath the machines (as
evidenced by the absorbent material), particularly in view of the uncon-
!/
troverted evidence that diecasting machines always leak. RIDCO has
produced no evidence indicating that the fluid could have come from some
other source besides the diecasting machines. It can also be reasonably
4/ See Findings of Fact Nos. 10 and 11 supra.
-------
inferred, given the large concentration of PCBs found in the hydraulic
fluid, "that PCBs'v/ould be present in measurable or detectable quantities
I/
in the leaked fluid. In short, the record does establish that RIDCO's
diecasting machines were using PCBs in a manner other than a totally'
I/
enclosed manner as defined in the PCB Ban Rule.
Accordingly, it is concluded that RIDCO has violated 40 C.F.R.
761.40(a)(7), by not marking its hydraulic systems using PCB hydraulic
fluid with the large PCB Mark ("ML") as required by 40 C.F.R. 761.40(a),
and has violated 40 C.F.R. 761.20(a), by its unauthorized use of PCBs
in a manner other than in a totally enclosed manner.
The Appropriate Penalty
The remainder of RIDCO's objections are directed to the penalty proposed
by the EPA of $15,000 for failure to mark the PCB hydraulic systems, and of
$20,000 for using PCBs in hydraulic systems that are not totally enclosed
without testing for PCBs in the hydraulic fluid. RIDCO contends that these
penalties do not properly take account of the statutory criteria for assess-
ing penalties under TSCA, Section 16(a), and are not in accord with the EPA's
PCB penalty policy.
_5/ The detectable limit of PCBs in oil samples is one ppm. Tr. 47. Here
there is no evidence whatever that the leaked fluid would have a lower
concentration of PCBs than the fluid in the machines.
_6/ As previously noted, supra, n. 2, RIDCO's defense that the EPA's
definition of "totally enclosed manner" is in excess of congressionally
delegated authority is not an appropriate defense in this proceeding and
therefore has not been considered.
-------
The statutory criteria for assessing penalties under TSCA, Section 16(a)
are listed in Section 16(a)(2)(B), 15 U.S.C. 2615(a)(2)(B), which provides '
as follows: .
In determining the amount of a civil penalty, the Administrator
shall take into account the nature, circumstances,"extent, and
gravity of the violation or violations and, with respect to the
violator, ability to pay, effect on ability to continue to do
business, any history of prior such violations, the degree of
culpability, and such other matters as justice may require.
To provide guidance on the assessment of penalties under Section 16,
the EPA enforcement staff has issued guidelines setting forth the general
policies it will follow and has supplemented these guidelines with a
I/
specific policy for assessing penalties for violations relating to PCBs.
The procedural rules for these proceedings require that I consider the
guidelines and PCB penalty policy in determining the appropriate penalty,
and that if I assess a penalty different in amount from that proposed in
*J
the complaint, I must give my reasons therefore.
The PCB penalty policy uses a matrix to establish an initial penalty
based on the nature, extent, circumstances, and gravity of the violation.
The initial penalty can then be adjusted upwards or downwards depending
upon consideration of the other statutory factors, i .e., culpability,
history of such violations, ability to pay, ability to continue in business,
I/
and such other matters as justice may require.
The matrix classifies violations involving 1,100 gallons or more of liquid
PCBs as a major violation. The EPA treats RIDCO's violation as one
involving nearly 1,320 gallons of PCB fluid. It arrives at this figure from
7/ See 45 Fed. Reg. 59770-59783.
§/ 40 C.F.R. 22.27(b).
9/ 45 Fed. Reg. 59777.
-------
7
:the fact that the PCS fluid initially drained from the eight machines was
: . 10/
stored in twenty-four 55 gallon drums. RIDCO contends, that the drums
were only filled to 75 percent of their capacity, which would reduce the
Itotal amount to less than a 1,000 gallons. Mr. Cohen's testimony, however,
ion which RIDCO relies, does not square with the testimony of Mr. Leo, of
i
;the Rhode Island Department of Environmental Management, who had looked in-
iside some of the drums and found them filled to one, two or three inches
1L/. " -
from the top. - The figure of 1,320 gallons is also consistent with the
i . .
Evidence as to the capacity of the reservoirs on the machines. It is
true that Mr. Rapaporte testified that-the machines could operate without
i ii/
/filling the tanks to their full capacity. That testimony, however,
i
is unconvincing as proof that the levels of fluid were generally much
lower than the capacity of the tanks in view of the testimony of the
EPA Inspector that he looked inside the reservoirs of two of the machines and
!!/
saw that they were both nearly full. As to the capacities of the tanks,
there is some conflict as to whether all the machines had a 200 gallon
capacity as the EPA inspector was told, or whether some may have had a
!!/
capacity of as little as 140 gallons. The truth probably lies somewhere
in between. Assuming, then, an average volume of 170 gallons per tank for the
eight tanks (midway between 200 and 140), there would be a total of 1,360
JJ)/ Tr. 129-30.
Jjy Tr. 140.
]_2/ Tr. 99.
JJJ/ Tr. 19.
14/ See Tr. 21; Complainant's Exhibit 2; Tr. 99, 101-02. Mr. Rapaporte
TTrst said that the capacity could range from 170 to 201 gallons., and
la.ter appeared to change these figures to 140 to 200 gallons. Tr. 99,
101-02.
-------
8 '
gallons, or about the same quantity as is indicated by the capacity of
the twenty-four 55 gallon drums, into v.'hich the fluid was drained. Hence,
it is concluded that the violation was properly classified as a major
violation.
With respect to the probable harm from the violations which forms the .
other axis of the matrix, Complainant classifies the marking violation as. a
level three violation and the unauthorized use as a level two violation.
The large PCB mark contains a warning that PCBs are present, and must be
specially handled and disposed of, and also provides a reporting point in
the event of an accident or spill. The potential injury to human beings and
the environment inherent in not making such information available to those
who come into contact with the fluid fully justifies classifying the absence
of the mark at level three. As to the failure to test and drain the hydraulic
systems, the EPA imposed these requirements in order to reduce the exposure
of man and the'environment to the highly toxic PCBs in as short a time as
15/
possible without unduly disrupting the diecasting industry. EPA points
out that by failing to test and drain the hydraulic systems, RIDCO has
extended the use of a large volume of PCBs in unenclosed systems and the
risk of exposure that this entails for a longer period than if the testing
V6/
and draining had been done. Such consequences justify the level two
classification for this violation.
It remains, then, to consider the statutory factors of RIDCO's ability
to pay, the effect of the penalty on RIDCO's ability to continue to do
business, any history of prior such violations, the degree of culpability,
and such other matters as justice may require.
]_5/ 44 Fed. Reg. at 31534-535.
16/ Complainant's post trial brief at 10.
-------
9
RIDCO does not claim that the $35,000 penalty is beyond its ability to
pay or would affect its ability to continue to do business. There is also
no evidence of any prior violations by RIDCO of this nature." According
to the PCB Penalty Policy, however, the absence of prior violations would
not be a reason for decreasing the initially determined penalty, but, instead,
the existence of prior violations would be a grounds for increasing the initial
!!/
penalty.
To show its lack of culpability, RIDCO argues that prior to May 27,'1983,
it did not know of the possible existence of PCBs in its hydraulic fluid. To
support this claim it points out that it has always purchased hydraul'ic fluid
by its trade name, such as Pydraul F-9 or Pydraul 312-C, on the basis of
W
recommendations made by the machine suppliers. RIDCO further asserts that
there is no evidence that the drums identified the fluid as containing PCBs
or that Monsanto, the supplier of the product, distributed any product safety
data sheets which indicated the existence of PCBs. Finally, RIDCO contends
that it never received any communication from Monsanto or the EPA regarding
I!/
the possible existence of PCBs in the hydraulic fluid. None of these
allegations is controverted by the EPA.
The record does support RIDCO's claim that it was unaware that its
hydraulic fluid contained PCBs. The test, however, is not what RIDCO
actually knew, which is what RIDCO seems to assume, but whether RIDCO should
have known of the relevant PCB requirements and their applicability to its
20/
operations. The published rule and preamble thereto, of which I may
YJJ 45 Fed. Reg. 59773-774 (September 10, 1980),
"1_8/ See Tr. 55; Complainant's Exhibit 2.
1_9/ See Tr. 56, 57, 93, 94.
207 Penalty guidelines, 45 Fed. Reg. 59773.
-------
10
take official notice, and also the evidence of record, disclose that a
reasonably prudent and responsible person in RIDCO's position would have
known that it should test its hydraulic fluid for its PCB content;
The PCB Ban Rule itself, 40 C.F.R. 761.30(e), contains specific pro-
visions for the use of PCBs in hydraulic systems in a manner other than .
a totally enclosed manner,"allowing for that use until July 1, 1984,
subject to certain conditions. R1DCO knew that its hydraulic systems leaked
fluid and therefore would not have been justified in assuming that its
!!/
system was operated in a totally enclosed manner. Relevant is 761.30(e)(1),
which provides as follows:
(1) Each person who owns a hydraulic system that
ever contained PCBs must test for the concentration
of PCRs in the hydraulic fluid of each such system
no later than November 1, 1979, and at least
annually thereafter. All test sampling must be
performed at least three months after the most recent
fluid refilling. When a test shows that the PCB con-
centration is less than 50 ppm, testing under this
subparagraph is no longer required. (Emphasis added).
The preamble to the PCB Ban Rule published with the rule in the
Federal Register, specifically discusses the use authorization for PCBs
in hydraulic systems, including diecasting machines, and stating in
pertinent part as follows:
This authorization is necessary because a large
number of die casting systems currently in use were once
filled with PCB hydraulic fluid. Although this use of
PCBs has been discontinued, equipment containing PCB
hydraulic fluid is still in service. Some systems have
been topped off with non-PCB fluids, and others have been
drained and flushed in an attempt to reduce PCB contamina-
tion. However, systems may still be contaminated with
residual PCB that either remain after flushing or are
21 / See supra t pp. 4-5.
-------
11
gradually released from interior surfaces. As a consequence,
hydraulic systems can contain concentrations of PCS ranging
from less than 10 ppm to thousands of parts per million
PCB. **** 22J
RinCO argues, that there is no evidence that either safety data sheets for
the hydraulic fluid or the drums they were shipped in designated or identified
the presence of PCBs. By this I assume that RIDCO means that it has not been .
shown that there was a specific reference to the presence of PCBs by their
chemical name of "polychlorinated biphenyl", or by the abbreviated term "PCB".
What the evidence does show is that RIDCO did not trouble to inform itself
about the chemical composition of the hydraulic fluid it was purchasing
but knew that it was purchasing from Monsanto a special type of hydraulic fluid
23/
that was more fire resistant than mineral oil. As Mr. Rapaporte testified:
Q. But everybody you called was aware he had PCB's in his
hydraulic diecasting machines, wasn't he?
A. [Mr. Rapaporte] Not necessarily. I'll tell you why.
Some people had never converted. Some of the diecasting
machines were run on mineral oil only, and they are prone
to fire. Most of the diecasters went away from the mineral
oil because they were afraid of fire regulations, plus the
insurance companies, I guess, they forced them to do it. It
costs, the mineral oil costs maybe $1.75 a gallon, and the
Monsanto oil was $7.00 a gallon. So, they figured what the
hell, they are working out at the dollar and a quarter gallon,
so they stuck and took a chance with the mineral oil.
Mineral oil never had PCBs in it. It was the inception of
Monsanto, that's the business that put the PCB's into the
oil. We changed from the mineral oil and spent all this
money for the Pydraul so we can make our plant safer, and
that's what we did. So all plants don't have PCB's. 247
22/ 44 Fed. Reg. 31534 (May 31, 1979). Similar language was contained in
tHe proposed rule published about a year earlier, in which the regulation of
hydraulic systems was limited to diecasting hydraulic systems. See 43 Fed.
Reg. 24809 (June 7, 1978). The final use authorization was changed to cover
other hydraulic systems besides diecasting machines, and to permit the test-
ing for PCBs and the use of PCB contaminated systems over a longer period
-of time. 44 Fed. at 31534-535.
_23/ Tr. 55-56, 105-07, 111-12.
24/ Tr. 111-12.
-------
12
Given the provisions of the PCB Ban Rule and its preamble, and the
fact that RIDCO had been purchasing hydraulic fluids over a period of '
\
many years of unknown chemical composition, I find that RIDCO, if it had
read the PCB Ban Rule, would not have been justified in assuming that its
hydraulic machines were not subject to regulation. I further find that
it is no defense to RIDCO, that it did not know about the PCB Ban Rule,
since publication in the Federal Register was all the notice to which
_25/
RIOCO was entitled.
RIDCO pleads that as a small company it cannot keep abreast of all
26/
developments in the field of environmental law. The PCB Ban Rule,
however, was a very significant development, issued pursuant to an express
congressional direction that PCBs be regulated. The final rule was
published following publication of a proposed rule, the receipt of numerous
27/
comments, and several public hearings. When RIDCO did start inquiring
about the PCB regulations it found that other diecasters were familiar with
25/ See 44 U.S.C. 1508. In Federal Crop Insurance Corp. v. Merrill,
T3~2 U.S. 380, 384-85 (1947), the Supreme Court stated, "[JJust as everyone
is charged with knowledge of the United States Statutes at Large, Congress
has provided that the appearance of rules and regulations in the Federal
Register gives legal notice of their contents.
26/ Memorandum and Proposed Findings of Fact of Respondent, at 11.
27/ See the list of Federal Register notices published in the preamble to
the rule, 44 Fed. Reg. at 31540.See also the support document for the
"PCB Ban Rule, PCB Manufacturing, Processing, Distribution in Commerce,
and Use Ban Reflation: Economic Impact Analysis, EPA 230-03/79-001
(March 1979).This document is referred to in the Federal Register notice
of the rule, 44 Fed. Reg. at 31514, and, therefore, is properly a subject
of official notice.
-------
13
28/
them. It would appear, then, that RIDCO's ignorance about the PCB reg-
ulation stens more from deficiencies in its own way of keeping itself-
informed about environmental regulations, than from any alleged inadequacy
in the notice to the public about the existence of the regulation.
In addition, to asserting its lack of culpability, RIDCO points to its .
good faith efforts to remedy the violations once it became aware of them. The
machines were drained, cleaned and refilled within four months of the EPA's
notice of violation. The cleanup was done under the general guidance of the
Rhode Island Department of Environmental'Management. RIDCO cooperated fully
with the State and used procedures which were to the fullest protection of
both the environment and the public safety. RIDCO did not stop with just
cleaning up the eight machines found to contain in excess of 50 ppm PCBs,
but also cleaned up another machine which contained 48 ppm PCBs even though
it was not required to do so by the PCB rule. The cleanup cost RIDCO
over $91,000. All of RIDCO's machines now have PCB levels of less than
_29/
50 ppm.
Again, none of RIDCO's claims are controverted by the EPA. The EPA,
however, does argue that the money spent in cleanup costs should be dis-
counted as a mitigation factor, because of the testing, draining and re-
filling costs alleged to be saved by RIDCO, and because many dollars spent
30/
would have gone to pay taxes anyway. Whether there were any savings on
28/ See Mr. Rapaporte's testimony, Tr. 111-12, 121. Mr. Cohen's subsequent
testimony, Tr. 127-29, can be read as qualifying Mr. Rapaporte's testimony
about the extent to which the PCB regulation was known among diecasters.
Mr. Rapaporte's testimony, however, seemed to be more spontaneous account
of what RIDCO was told by other diecasters, and to more accurately reflect
"the facts.
^9/ See Tr. 56, 57, 93, 94; Respondent's Exhibit I.
30/ See Complainant's Post-trial brief at 10.
-------
14
testing and draining and filling the machines is purely speculative. Under
the regulation itself, RIPCO v;ould have had to test for concentrations of
PCBs by November 1, 1979, and at least annually thereafter. If a machine
showed a. concentration of over 50 ppm PCBs, it would have to be drained and
refilled but there was no requirement that the machine be brought down to a":.
!L/
level of below 50 ppm, until July 1, 1984. Here, RIPCO did the necessary '
testing, draining and refilling of its machines to bring the machines down to
a level of below 50 pptn almost two years before the July 1984 date. In
some cases this appears to have involved draining and refilling .the machine
327 '
three times. It seems unlikely that this was less costly to RIDCO than
if the expenditures for testing, draining and refilling had been spread out
over a longer period. Moreover, RIDCO did not confine its draining and
refilling to the eight machines found to contain over 50 ppm PCBs, but also
drained and refilled another machine in which the hydraulic fluid had tested
33/
at 48 ppm PCRs. As to the savings in taxes, it would seem that balanced
against these, whatever they may be, should be the production costs which
RIDCO incurred as a result of the machines being out of service during the
_34/
cleanup, a sum estimated by RIDCO's officer to be over $320,000.
Aside from attempting to discredit RIDCO's cleanup costs, which I find
unpersuasive, the EPA has ignored RIOCO's argument that its good faith efforts
to correct the violation and it's cooperation with the EPA and willingness to
do more than what minimally may have been required of it justify a sub-
stantial reduction in the initially determined penalty for both the marking
3\_f 40 C.F.R. 761.30(e).
22/ Tr. 96.
337 Respondent's Exhibit I, Tr. 64-65.
34/ Tr. 68
-------
15
and unauthorized use violation. Instead, the EPA has implicitly taken the
position that no reduction is warranted. Nevertheless, RIDCO's argument
3S/
has support in the guidelines and PCB Penalty Policy. . . It also has merit.
The proposed penalty, of. $35,000, accordingly, is rejected as not in
accord with the guidelines and the PCB Penalty Policy, and excessive under
the facts in tins case.
As to how much the total penalty for these two violations should be
reduced, the guidelines propose an adjustment of up to 15% for the attitude
of the violator, i.e., its good faith efforts to comply with the regulations,
the promptness of its corrective actions and any assistance provided the
!§/
EPA to minimize the harm to the environment. That figure, hov;ever, is a
guide only and not an inflexible limit to cover all cases. In this case,
I find that the promptness and thoroughness with which RIDCO acted to
eliminate the hazards presented by its hydraulic systems merits 'a reduction
of 25% in the proposed penalty. I also find that it would be in interest
of justice to credit against the penalty the $10,000 in costs estimated to
have been incurred in cleaning up the ninth machine, which contained
:35/ See 45 Fed. Reg. 59773, 59775.
^67 45 Fed. Reg. 59773.
37/ Tr. 67.
-------
16
less than 50 ppm. Taking these two factors into account, I find that an
38/
appropriate penalty is $16,250.
19/ . .
ORDER .-
Pursuant to Section 16(a) of the Toxic Substances Control Act (15 U.S.C.
2615(a), a civil penalty of $16,250 is hereby assessed against Respondent
RIDCO Casting Co., Inc. for the violations of the Act found herein.
Payment of the full amount of the civil penalty assessed shall be made
within sixty (60) days of the service of the final order upon Respondent by
forwarding to the Regional Hearing Clerk a cashier's; check or certified check
payable to the United States of America.
Gerald Harwood
Administrative Law Judge
December 28, 1983
38/ The EPA argues that RIDCO failed to post the large PCB mark after
receiving notice of the violation. Post-trial brief at 9. Presumably, what
is referred to is that there is no evidence that the machines themselves
were marked between the time of the inspection and the time the fluid
was brought down to a concentration of less than 50 ppm. In view of the
fact that RIDCO promptly directed its efforts to removing the basic cause
of the violation, namely, the presence of hydraulic fluid with PCBs in
excess of 50 ppm, and also that in doing the cleanup, the PCBs were properly
stored and their containers properly marked (Tr. 63, 136-37), any violation
represented by the absence of the mark in the machines themselves between the
inspection and the time the cleanup was finished was a technical violation
at most, and does not adversely reflect on RIDCO's good faith efforts to
comply.
39/ Unless an appeal is taken pursuant to the rules of practice, 40 C.F.R.
22.30, or the Administrator elects to renew the decision on his own motion,
the initial decision shall become the final order of the Administrator.
See 40 C.F.R. 22.27(c).
-------
27
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
IN THE MATTER OF: ) Docket No. TSC-A VII-83-T-191
)
7 H Agriculture and Nutrition )
Company, )
)
Respondent )
1. Toxic SubstancesControl'Act - Disposal of Hazardous
Waste - 4~cr Cf~R~, FaTt7 7 5 ~ promu 1 gated pursuant To S~₯ction
6 of TSCA, requires persons who dispose of wastes containing
TCDD to notify the Administrator sixty days before disposal.
Respondent's failure to comply with said regulation is
unlawful under the express provision of Section 15 of TSCA,
15 U.S.C. 2614, and subjected it to a civil penalty pursuant
to Section 16 of TSCA, 15 U.S.C. 2615.
2. Toxic Substances Control Act - Disposal of Hazardous Waste -
Absent a showing that the receiving facility, to which
Respondent twice transported waste containing TCDD, was a
facility "permitted for disposal of TCDD" under Section
3005(c) of the Resource Conservation and Recovery Act,
Respondent does not qualify for the "exclusion provided by
40 CFR 775.197 and is subject to the prohibitions and
requirements provided by 40- CFR Part 775.
3. Administrative Law - Regulations - Regulations issued under
a claimed authority and pursuant to law carry a strong
presumption of validity; any attack on Administrative
Agency regulations must be made at the rule-making stage
and has no place in an administrative hearing.
4. Administrative Law - Regulations - Where the construction
of Administrative regulations is at issue, deference to
the Agency interpretation is clearly in order. The inter-
pretation need not be the only interpretation but simply
a reasonable one.
5. Admi n i st rat i ve Law - U.S. Constitution - Administrative
Agencies and Administrative Law Judges cannot be expected
to entertain Constitutional issues.
6. Administrative Law - Public Policy - In regulatory offenses
thepublicinterest outweighs the individual interest.
Thus, for sake of adequate public protection it is neces-
sary that Respondent conform to a standard of conduct
which will insure the result intended by Congress.
-------
Resource Conservation and Recovery Act - State Authority
Authority grantedto a state to issue permits under Tts
hazardous waste program contemplates that such state
program will be equivalent to, consistent with and no
less stringent than the Federal program; 42 U.S.C.
Sections 6926, 6929.
Administrative Law - Toxic Substances Control Act - Intent -
Intent Ts not an e~leme^nt of the offense charged and For
which a civil penalty is assessed under Section 16(a) of
TSCA. Appearance of the subject rules and regulations in
the Federal Register gave Respondent legal notice of their
contents.
Toxic Substances Control Act - Civil Penalty - Where a
vTola tion is shown, a civi 1 penal ty shouId b~e assessed
after consideration of the factors set forth in Section
16(a)(2)(B) of TSCA and the guidelines issued for the
assessment of civil penalties relating to toxic substances
Appearances
For Respondent: Donald F. Martin, Esquire
Blackwell Sanders Matheny
Weary & Lombardi
Five Crown Center
2480 Pershing Road
Kansas City, Missouri 64108
For Complainant: Henry F. Rompage, Esquire
Office of Regional Counsel
U.S. Environmental Protection Agency
Region VII
324 East llth Street
Kansas City, Missouri 64106
INITIAL DECISION
Marvin £T. Jones
Administrative Law Judge
By Complaint filed August 12, 1983, Respondent, T H
Agriculture and Nutrition Company, Kansas City, Kansas (here'
inafter "Respondent"), is charged with two violations of the
regulation 40 CFR 775.'190(b). Said Complaint alleges, in
Counts I and II, respectively:
-2-
-------
1 . That Respondent, on September 11, 1981, shipped for dis-
posal Ttr" least 20 cubic yards of waste material contaminated
with tetrachlorodibenzo-p-dioxin" (hereinafter "TCDD") "from
the the manufacture of 2, 4,5-TCP or its pesticide derivatives"
*
without giving a 60-day notice to United States Environmental
Protection Agency (hereinafter "EPA", "Complainant" or the
"Agency") of said intended disposal, as by said regulation
required; and
2. That Respondent, on September 25, 1981, shipped for
disposal "at least 20 cubic yards of waste material
contaminated with TCDD from the manufacture of 2,4,5-TCP or
its pesticide derivatives".without giving a 60-day notice to
Complainant of said intended disposal, as by said regulation
requ i red .
On each count, Complainant proposes the assessment of a
civil penalty in the amount of $25,000 because of Respondent's
alleged failure to notify EPA of said intended disposal 60
days prior the reto.
Said regulation, 40 CFR 775.190(b), provides, in pertinent
part, as follows:
(b) Disposal notification. Any person
who disposes of chemical substances or
mixtures for commercial purposes who wishes
to dispose of wastes contai ni ng TCDD shall
notify the Assistant Admi ni strator Fixty
(60) days prior to their intended disposal
of such wastes. (Emphasis supplied.)
In pertinent part, 40 CFR 775.180 states:
... In addition, this subpart requires
persons who dispose of wastes containing
TCDD to notify the Administrator sixty
days before disposal.
-3-
-------
Said regulations were promulgated pursuant to Section 6,
Toxic Substances Control Act (hereinafter "TSCA")., 15 USC
2605, which provides as follows:
-Regulation of hazardous chemical substances
andmixtures
(a) Scope of regulation. - If the Administrator
finds that the re -is a reasonable basis to con-
clude that the manufacture, processing, dis-
tribution in commerce, use, or disposal of a
chemical substance or mixture, or that any
combination of such activities, presents or
will present an unreasonable risk of injury to
health or the environment, the Administrator
shall by rule apply one or more of the following
requirements to such substance or mixture to the
extent necessary to protect adequately against
such risk using the least burdensome requirements
(1) A requirement (A) prohibiting
the manufacturing, processing, or dis-
tribution in commerce of such substance
or mixture, or (B) limiting the amount
of such substance or mixture which may
be manufactured, processed, or distri-
buted in commerce.
* * *
(6)(A) A requirement prohibiting or
otherwise regulating any manner or
method of disposal of such substance
or mixture, or of any article containing
such substance or mixture, by its manu-
facturer or processor or by any other
person who uses, or disposes of, it for
commercial purposes.
At a prehearing conference held in Room 101, 324 East
llth Street, Kansas City, Missouri, on October 18, 1983,
beginning at 9:30 a.m., and at the adjudicatory hearing held
in Room 415B, at the aforesaid address, on October 27» 1983,
at 9:30 a.m., Respondent admits that no notice was given '
respecting said shipments (TR. 3) and that said shipments
-4-
-------
or combinations of such hazardous waste and other solid waste,
proposed to be disposed of, treated, transported, or stored,
and the time, frequency or rate of such handling as well as
the site thereof.
Respondent contends in its Answer, dated August 30, 1983,
and its letter, dated Septe.mber 6, 1983, that, by virtue of
the Interim Status of Texas Ecologists, Inc., pursuant to 42
U.S.C. 6925 (-e), and the State Hazardous Waste Program of Texas,
authorized by EPA (pursuant to 42 U.S.C 6926), and "the
decisions and permits made and issued by the State of Texas
under said program, making the subject facility authorized
and permitted to receive and dispose of the materials shipped",
that the aforesaid shipments were excluded from the 60-day
notification requirements. _!_/ It is further there contended
that EPA's position that the 60-day notification is required
by the regulations despite the "Interim Status" and authorized
state program and the permits and authority granted Texas
Ecologists, Inc., denies Respondent due process (under the
14th Amendment of the U.S. Constitution) because said
requirements and regulations are indefinite, vague and
ambiguous "in not conveying the proscribed conduct when
measured by common understanding and practices" (page 2,
Respondent's letter, dated September 6, 1983).
I/ Respondent apparentl.y refers to 40 CFR 775.197 set out hereinabove
In this regard, 42 U.S.C. 6929 modifies 42 U.S.C. Section 6926(d).
While the latter section provides that state action under a
hazardous waste program shall have the same force as action by _
the Agency, Section 6929 provides that a state may not impose
provisions 1 ess stringent than provided by the Act.
-6-
-------
were made (Respondent's letter, dated September 6, 1983),
to Texas Ecologists, Inc.. waste disposal facility., in Robs town.,
Texas, and that the carrier used to transport said hazardous
waste was Materials Recovery Enterprises, Incorporated (TR.
i
23). However, Respondent denies that a violation occurred,
relying on 40 CFR 775.197(a), to wit:
Exclusions.
(a) This subpart does not apply to persons
disposing of wastes containing TCDD at f a c 2_]j_t_i e_s_
permitted for disposal of TCDD under section
3005(c")oTThe Resource Conservation and Recovery
Act, 42 U.S.C. 6925(c). (Emphasis supplied.)
Said section 3005(c), 42 U.S.C. §6925(c), provides, in
pertinent part:
(c) Permit issuance
Upon a determination by the Administrator
(or a State, if applicable), of compliance
by a facility for which a permit is applied
for under this section with the requirements
of this section and section 6924 of this
title, the Administrator (or the State) shall
issue a permit for such facilities. . .
Section 6924 sets down standards applicable to owners and
operators of such facilities, including (subsection 7)
compliance with the requirements of said Section 6925.
Section 6925, Subsection (b)'- Requirements of Permit
application - provides that applications for a permit "shall
contain such information as may be required under regulations
promulgated", including the composition, quantities and
concentrations of any hazardous waste identified or listed,
-5-
-------
Further, Respondent does not admit that it comes within
the definition (40 CFR 775.183[c]) of "disposes of. ..[chemical
substances or mixtures] for commercial purposes." There is
«
no question that "persons who use chemicals in their commercial
i
enterprise also are considered to dispose of their waste
chemicals for commercial purposes." In the Preamble to 40
CFR Part 775, contained in 45 FR at page 15598 (March 11,
1980), it is stated:
For example, while a manufacturer of the
pesticide 2,4,5-T may be subject to the
jurisdiction of FIFRA with regard to the
registration of the pesticide, he is subject
to TSCA jurisdiction for regulation of the
TCDD waste disposal incidental to that pro-
duction. EPA considers any waste disposal
(or actions incidental thereto) by Vertac,
for example, to be disposal for commercial
purposes because Vertac is engaged in the
commercial manufacture -of pesticides."
The remaining contentions of Respondent were also addressed
in said Preamble, supra , page -15598, column 2, where it
states, in summary:
Persons shall not >e allowed to dispose
of TCDD wastes in facilities covered only
by intermin status under section 3005(e)
of RCRA without prior notification.
Discussion and Conclusions
On consideration of the entire record and the briefs submitted
by the parties, I find that a civil penalty should be assessed.
All proposed findings inconsistent herewith are rejected.
Under-the pertinent.regu1 ations cited hereinabove, Respondent
clearly violated 40 CFR 775.190(b) in failing, on September 11,
1981, and again on September 25, 1981, to give the 60-day
-7-
-------
notice to EPA of its intended disposal of TCDD as by said
regulation required. I further find that Respondent does not
come within the exclusion provided, in Section 775.197(a) of
/
40 CFR for the reason that.the facility to which Respondent's
i
TCDD waste was shipped was not, on this record (TR. 5),
"permitted for disposal of ''T C D D. " In so finding, I have
given "weight and considerable respect" to the Preamble to 40
CFR Part 775 (45 FR, page 15598. March 11. 1980), supra.
(see Withers v. USPS. 417 FS 1 [1976]; Black Hills Video
Corporation v. FCC, 399 F.2d 65 [1968]). Regulations issued
under a claimed authority and pursuant to law carry a strong
presumption of validity (Edwards v . Owe n s , 137 FS 63 [1956];
Foremost-McKesson. Inc. v. Davis. 488 SW 2d 193 [MO]).
^Further, it is well settled that the statutory interpretation
of an agency which is charged with the administration of a
particular act will not be overturned, unless it is patently
unreasonable. When, as here, the construction of an
administrative regulation (rather than a statute) is an issue,
deference to the Agency interpretation is even more clearly
in order. The interpretation need not be the only interpretation
but simply a reasonable one (see Train v. NRDC, 421 U.S. 60,
-I.e. 87 [1975]; Udall v. Tallman. 380 U.S. 1, 16-18 [1965];
McLaren v. Fleischer, 256 U.S. 477, 480 [1921]).
Respondent's claim of "denial of due process" and its
attack on the regulation are both misplaced. I am precluded
-8-
-------
from passing on the constitutionality of procedures which I
am called upon to administer, Frost v. Weinberger (NY 1974)
375 FS 1312, 1313(11), 515 F2d 57; see also City of Joplin v.
Industrial Commission of HO (MO 1960), 329 SW 2d 687. In
Public Utilities Commission v. U.S., 355 U.S. 534, I.e. 539,
78 S.Ct. 446, I.e. 453, the Supreme Court observed (with
reference to an administrat-ive proceeding): "The issue is a
Constitutional one that the Commission can hardly be expected
to entertain", confirming F PC v. Texaco , 377 U.S. 33 (1964).
In Storer Broadcasting Co. v. U.S., 351 U.S. 192, I.e. 205,
76 S.Ct. 763, I.e. 771 (1950), the Court held that an attack
on the Rules and Regulations of an Administrative Agency must
be made in the "rule making proceeding" and has no place in
an administrative hearing. See further Weinberger v. Salfi,
422 U.S. 749, I.e. 765 (1975).
The underlying logic for such holdings is apparent.
Using the language of Bel si nger v. D.C. (DCDC 1969), 295 FS
159, 436 F. 2d 214, "the offense is not a criminal offense
but a regulatory one. In regulatory offenses the public
interest outweighs the individual interest." Thus, for sake
of adequate public protection, it is necessary to hold Respondent
to that standard of conduct which will insure the result
intended by Congress. On this record, TCDD is not now and
was not, in September, 1981, a "listed waste" under the
Resource-Conservation and Recovery Act (RCRA) (TR. 6).
. .-9-
-------
Further, it was "not possible for a landfill to be fully
permitted for disposal of TCDD" under RCRA Section 3005(c)
in September, 1981 (TR. 5). On this record, the Part A
Application of Texas Ecologists (to whom said shipments by
i
Respondents were made) did not list TCDD as a hazardous waste
s/
which it would receive (T R .'. 4 4 ) , though said Part A Application
did, in fact, list over 400 RCRA "listed wastes" (Respondent
["R"] Exhibit ["Ex."] 1. Respondent's only witness, Willis H.
Hart (TR. 22), Thcinpson-Hayward Chemical Company Vice
President for Engineering and Environment, who has the
responsibility to see that Respondent is in compliance with
regulations concerning the environment (TR. 47), testified
that he found that the receiving landfill, Texas Ecolocists,
.at Robstown, Texas, had an EPA identification number which
signified, to him, that "they had filed a notification with
(EPA) and had submitted a Part A application, as a minimum"
(TR. 24). He made a telephone call to them and confirmed
"they were a hazardous waste disposal facility, the types of
materials in general they could take" and that they had a
state permit (TR. 25). Mr. Hart was familiar with the
regulations in 40 CFR Part 775 (TR. 26), and with the
requirements of Sections 3005 and 3010 of the Act (TR. 31).
He did not determine that TCDD was listed on the Part A
Application of Texas Ecologists (TR. 44); he did not contact
EPA or any Texas state agency to determine if the state agency
had authority under RCRA to permit landfills to take TCDD
(TR. 46); nor did he determine if Texas Ecologists had been,
-10-
-------
in fact, "permitted for disposal of TCDD". (TR. 46). Mr.
Hart did determine, however, in contacting the Texas state
agency administering the state's waste disposal program,
that the 1972 permit issued to said Texas Ecologists (R Ex. 7)
was still in force and effect (TR. 64). Since he was familiar
with the provisions of 40 CfR Part 775, and made contact with
the state agency and said receiving facility, the question
remains why he did not inquire specifically whether said
Texas Ecologist was a facility "permitted for disposal of
TCDD". This inquiry could easily have been made to the EPA
Regional Office in Kansas City, Missouri, hut was not. Such
inquiry likely would have revealed that no landfills were
anywhere "permitted for disposal of TCDD" (TR. 5).
Contrary to Respondent's argument, the violations with
which Respondent is charged were explicitly proscribed by the
language of Sections 775.190(b) and 775.180 of 40 CFR, and
i
Respondent does not come within the exclusion provision of 40
CFR 775.197(a). Respondent's failure to make the essential
factual determination that the subject receiving facility was
not a facility "permitted to receive TCDD" was not due to its
being unaware of "a requirement prohibiting...(said) disposal";
but rather to its indifference to, or a reluctance to recognize,
the literal wording of the rules and regulations governing said
shipments. This is not to say that it is a defense to the
charge if Respondent claims it did not know of the prohibition
-11-
-------
contained in the rule cited hereinabove. Publication of the
rules in the Federal Register imparted notice to Respondent
» \
of said provisions and, legally, is the" notice to which it
was entitled. 2/
c
Civil Penalty , '
5
The statutory criteria for assessing penalties under
TSCA, Section 16(a), are listed in Section 16(a)(2)(B), 15
U.S.C. 2615(a)(2)(B) , which provides as follows:
In determining the amount of a civil penalty,
the Administrator shall take into account the
nature, circumstances, extent, and gravity of
the violation or violations and, with respect
to the violator, ability to pay, effect on
ability to continue to do business, any history
of prior such violations, the degree of culpa-
bility, and such other matters as justice may
require.
To provide guidance to the assessment of penalties under
Section 16, the EPA enforcement staff has issued guidelines
setting forth the general policies it will follow and has sup-
plemented these guidelines with a specific policy for assess-
ing penalties for violations relating to polych1 orinated biphenols
("PCBs") and other toxic substances. 3/
2/ See In the Matter of Ridco Casti ng Co., Docket No. TSCA-
82-1089 (1983), citing~F edera1 Crop Insurance Corp. v. Merrill.
332 U.S. 380, 384-85 (1947), where the Supreme Court
stated, "[J]ust as everyone is charged with knowledge of
the United States Statutes at Large, Congress has provided
that the appearance of rules and regulations in the federal
Regi ster gives legal, notice of their contents."
3/ See 45 Federal Register 59770-59783 (September 10, 1980),
referred to herein as the PCB penalty policy.
-12-
-------
The procedural rules for these proceedings require that I
consider the guidelines and PCB penalty policy in determining
the appropriate penalty, and that if I assess a penalty
different in amount from that proposed in the Complaint, I
i
must give my reasons therefore. £/
The PCB penalty policy fcses a matrix to establish an
initial penalty based upon the nature, extent, circumstances
and gravity of the violation. .The initial penalty can then
be adjusted upwards or downwards depending upon consideration
of the other statutory factors, i.e., culpability, history of
such violations, ability to pay, ability to continue in
business and such other matters as justice may require. ^/
The regulation here twice violated is a "chemical control"
regulation which places constraints on how TCDD is handled in
an effort to minimize the risk presented by this very toxic
substance. ^/ I have concluded that said transportation and
handling on both of the occasions here considered presented a
"significant chance" to cause damage to public health and
the environment, i.e., the likelihood of damage was lessened
by the use of an experienced means of transport. It is the
"probability of harm" or potential for harm and the risk
inherent in the violation as it was committed that is properly
considered rather than any actual harm that resulted from
subject violation. 7/
V 40 CFR 22.27(b).
$/ 45 Federal Register 59777 (September 10, 1980).
6/ Ibid. 59771.
]_/ Ibid. 59772.
-13-
-------
The circumstances (probability of damages), indicated on
this record, are at "mid-range level 3" on the horizontal axis
\
of the matrix (45 FR at 59771). The "extent of potential damage"
on the vertical axis of the..matrix is "major."
in the premises, upon consideration of the statute and
t
the guidelines for the assessment of penalties relating to
toxic substances, and all of the factors herein set forth, I
find that a civil penalty of 5-15,000 should be assessed for
each of said violations by Respondent, for a total penalty of
$30,000.
I do not find that any adjustment is warranted because of
Respondent's "ability to pay." No claim of inability to pay
is made on this record nor it is claimed or shown whether
Respondent's ability to continue in business will be affected
by assessment of the penalties proposed. Further, there is
no evidence in this record that Respondent's history of com-
pliance is unfavorable.
It should be pointed out that i ntent to violate is not a
factor to be considered; J5/ however, "culpability" of the
violator should be and has been considered in determining if
an adjustment to the penalty amount is warranted. No adjust-
ment to the penalty- for this cause is appropriate.
8/ Cf. 15 U.S.C. 2615(a) with 2615(b). (See 16[a] and [b].)
The words "knowingly or willingly" which appear in
Section 16(b) do not appear in Section 16(a). Thus,
while intent is an element of the offense for which a
criminal penalty may be assessed, it is not an element
of offenses for which civil penalties are assessed.
-14-
-------
ORDER £/
Pursuant to Section 16(a) of the Toxic Substances .Control
Act (15 U.S.C. 2615[a]), a civil penalty of $30.000 is hereby
assessed against "Respondent T H Agriculture and Nutrition
Company for the violations of the Act found herein.
Payment of the full amo'unt of the civil penalty shall he
made within 60 days of the Service of the Final Order upon
Respondent by forwarding to the Regional Hearing Clerk, U.S.
EPA, Region Vll, a cashier's check or certified check payable
to the Treasurer, United States of America.
DATED: January 10, 1934 . //'/i,\
Marvin E . Jones
Administrative Law Judge
2/ Unless an Appeal is taken pursuant to the Rules of Practice,
40 CFR 22.30, or the Administrator elects to review the Decision
on his own Motion, this Initial Decision shall become the
Final Order of the Administrator (40 CFR 22.27[c]).
-15-
-------
CERTIFICATION OF SERVICE
I hereby certify that, in accordance with 40 CFR 22.27(a),
i
I have this date forwarded to the Regional Hearing Clerk of Region
t
VII, U.S. Environmental Protection Agency, the Original of the
above and foregoing Initial ''Decision of Marvin E. Jones,
Administrative Law Judge, and have referred said Hearing Clerk to
said section which further provides that, after preparing and
forwarding a copy of said Initial Decision to all parties, she
shall forward the Original, along with the record of the proceeding,
to the Hearing Clerk, who shall forward a copy of said Initial
Decision to the Administrator.
DATED: January 10, 1984
Mary Lou Clifton
Secretary to Marvin E. Jones, ADLJ
-------
*
UNITED STATES ENV!3G\'V,ENTAL PROTECT, CN i.C-^'-.CV
=IEGON v;i
2T4 EAST ELEVENTH. STREET
K.A?;=AS CITY. '.'.:sso'jRi - 6'^D6
IN THE MATTER OF
T H Agriculture and Nutrition
Company
Respondent
Docket No.
CERflFICATION OF SERVICE
TSCA VII-
83-T-19L
In accordance with Section 22.27(a) of the Consolidated
Rules of Practice Governing the Administrative Assessment of
Civil Penalties ... (45 Fed. Reg., 24360-24373, April 9,
1980), I hereby certify that the original of the foregoing
Initial Decision issued by Honorable Marvin E. Jones, along
with the entire record of this proceeding was served on the
Hearing Clerk (A-110) , Environmental Protection Agency,
401 M Street, S.W., '.'ashing ton, D.C. 20460 by certified .-nail,
return receipt requested; that a copy was hand-delivered .to
Counsel for Complainant, Henry F. Ro:npage, Office of Regional
Counsel, Environmental Protection Agency, Region 7, 324 E.
llth Street, Kansas City, Missouri; that a copy was served by
certified mail, return receipt requested on Respondent's attorney
Donald F. Martin, Blackwell, Sanders, Matheny, Weary & Lorabardi;
Five Crown Center, 2480 Pershing Road, Kansas City, MO 64108.
If no appeals are made (within 20 days after service of
this Decision), and the Administrator does not elect to review
it, then 45 days after receipt this will beco;oe the Final
Decision of the Agency (45 F.R. Section 22.27(c), and Section
22.30).
1984.
Dated in Kansas City, Missouri this 10th day of January
ita Ricks
Regional Hearing Clerk
cc: Honorable Marvin E. Jones
Administrative Law Judge
-------
28
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Hatter of * )
)
General Electric, Aircraft - )
Engine Group, ) Docket No. TSCA-V-C-147
)
Respondent )
1. Toxic Substances Control Act - PCB - The 50 ppm regulatory cutoff
in the PCB Ban Rule does not apply to the cleanup of PCB spills.
2. Toxic Substances Control Act - PCB - A PCB spill must be cleaned up
to the 1ov,-?st level below 50 ppm practicably attainable through the
use of normal cleanup nethods.
3. Toxic Substances Control Act - PCB - Respondent assessed a penalty
of $3,750, where the spill had been cleaned up to a level of 13 ppm
PCBs, but the record showed that it could have been cleaned up to
much lower levels by application of normal cleanup methods.
Appearances:
Lisa S. Seglin, United States Environmental Protection
Agency, Region V, Chicago, Illinois, for Complainant.
Jeffrey 0. Cerar, Squire, Sanders, and Dempsey, 1201
Pennslyvania Avenue, N.W., Washington, D.C. for
Respondent.
-------
INITIAL DECISION
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
section 16(a), 15 U.S.C. 2615(a), for the assessment of civil penalties for
violation of a rule promulgated under section 6(e) of the Act, 15 U.S.C.
2605(e), establishing prohibitions and requirements for the manufacture, .
processing, distribution in commerce, use, diposal, storage and marking of
I/
polychlorinated biphenyls ("PCB Ban Rule"), 40 C.F.R. Part 761. The
complaint issued by the Director, Waste Management Division, Region V,
United States Environmental Protection Agency ("EPA"), charged Respondent
General Electric Aircraft Engine Group ("General Electric") with violation
of the PCB Ban Rule by storing a 55-gallon drum containing PCB contaminated
material and five 5-gallon cans of PCB liquids in a storage area not complying
with the requirements of the PCB Ban Rule, by failing to mark the storage
area as required by the Rule, by not maintaining records required by the
Rule with respect to the drum and containers, and with not properly dis-
posing of PCBs that were released after a high pressure airline ruptured.
A total penalty of $20,000 was requested, $1,500 for the storage violation,
$500 for the marking violation, $1,000 for the recordkeeping violation and
$17,000 for the disposal violation.
]_/ Section 16(a) provides in pertinent part as follows: "(1) Any person
who violates a provision of section 15 shall be liable to the United
States for a civil penalty in an amount not to exceed $25,000 for each
such violation. Each day such violation continues shall, for the purposes
of this subsection, constitute a separate violation of section 15."
TSCA, section 15, makes it unlawful among other acts, for any person to
"(1) fail or refuse to comply with . . . (c) any rule promulgated . . .
under section . . . 6."
-------
2
General Electric filed an ans-.ver to the complaint. The issues as to
the storage, marking, and recordkeeping violations, hov:ever, v;ere really
defined by a stipulation between the parties, according to which the charge
relating to the 5-gallon containers was dropped, the remaining violations
admitted, and as to the requested penalty for them, General Electric disputed
only the appropriateness of the penalty for the recordkeeping violation . .
y
involving the'SB-gallon drum. With respect to the alleged improper disposal,
General Electric denied the violation, asserting that by cleaning up the PCBs
released by the rupture of the airline to a level of less than 50 ppm, it had
complied with the PCB Ban Rule. General Electric also contended that the
requested penalty for that violation was excessive.
A hearing was held in Washington, D.C. on October 12, 1933. Thereafter,
each party submitted proposed findings of fact, conclusions of law and a
proposed order together with supporting briefs. On consideration of the
entire record and the submissions of the parties, a penalty of $6,750
is assessed. The findings, conclusions and reasons for this penalty follow.
All proposed findings and conclusions which are inconsistent with this
decision are rejected.
Findings of Fact
1. Respondent General Electric is a New York Corporation which at all times
I/
relevant to this action maintained a facility in Cincinnati, Ohio.
2. On October 6, 1982, an inspection of the General Electric facility was
2J See Transcript of Proceedings ("Tr.") 4.
V According to the complaint, Par. 1, which was not denied by General
Electric, the facility was located in Cincinnati, Ohio. The actual location
appears to have been in Evendale, Ohio, a suburb of Cincinnati. See
Respondent's proposed finding of fact No. 2. In the transcript, the
location is referred to as "Eatondale". See e.g., Tr. 86.
-------
conducted by Ohio Environmental Protection Agency employees as representatives
of the EPA to determine compliance v.'ith the PCB Ban Rule. Complainant's
Exhibit 1; Tr. 9.
3. At the time of the inspection, General Electric maintained one 55-
gallon drum of PCB solids in a PCB storage area in Building 705 which was
not curbed as required by 40 C.F.R. 761.65(b). Answer, Par.l; Tr. 4.~
4. At the time of the inspection, the PCB storage area in Building 705
was not marked as required by 40 C.F.R. 761.40(e) (10). Answer, Par. 4;
Tr. 4.
5. At the time of the inspection, the annual PCB document maintained by
General Electric for the facility did not show the date the SB-gallon
drum of PCB solids was removed from service, the date it was placed in
storage for disposal, and the total weight in kilograms of PCBs as re-
quired by 40 C.F.R. 761.180(a). Answer, Par. 5; Tr. 4.
6. At the time of the inspection, the EPA inspectors observed an oily
residue on an interior wall and adjoining ceiling in Building 302, in an
area used as a machine shop. The residue was heavier at the top of the
wall and on the ceiling, and lighter at the bottom of the wall, indicating
that the oil had run down the wall. Tr. 12, 103; Complainant's Exhibit 1.
7. The inspectors took two swab samples from the wall, one from the
sixth or ninth cinderblock up from the floor, and one from the fourteenth
cinderblock. The samples were taken by wiping a cotton swab dipped in
hexane, a solvent, over a 100 square centimeter (100 cm^) area marked out
.!/
with a template. Tr. 13-15; Complainant's Exhibit 1.
47 While Ms. Sword testified that she took a swab sample from the ninth
cinderblock up from the floor (Tr. 14), the inspection report states that
the sample was taken six blocks from the floor (Complainant's Exhibit 1).
It is immaterial whether it was the sixth or the ninth block.
-------
4
8. Sample ER 335, taken 14 blocks up frt>n the floor, on analysis, disclosed
a PCB concentration of 2.2 micrograms/cm2 (220 ug/100 cm2), and sample ER 336
taken from the block closer to the floor disclosed a PCB concentration of
0.31 micrograrns/cm2. (31 ug/100 cm2). Complainant's Exhibit 1; Tr. 45 ' '.
9. Duplicate samples were taken by the inspectors from 100 cm2 areas
adjacent to the EPA's sample areas, and given to General Electric. These
were tested for General Electric by Kettering Laboratories and were reported
to contain 13 and 2.5 parts per million (ppm) PCRs respectively in a 10 ml
I/
hexane solution. Tr. 14; General Electric proposed finding No. 38.
10. The oily residue on the wall and ceiling resulted from the rupture of
a compressor airline in Building 302 on February 17, 1982. The history of
this incident and General Electric's actions with respect to it are as
follows:
A. The airline rupture spread asbestos insulation on the outside of
the line throughout the area and also sprayed the wall and ceiling in the
vicinity of the ruptured pipe with about two to three quarts of oil that
had accumulated inside the pipe. Tr. 88, 103; Complainant's Exhibit 5;
Respondent's Exhibit 3.
_5/ General Electric as support for the results of the Kettering tests cites
a document not introduced into evidence but furnished in its prehearing
exchange as "Respondent's Document 2." A document not introduced into
evidence does not consitute evidence and cannot be relied on to support a
finding, unless it is a document that can be officially noticed, which cannot
be said of Document 2. The EPA, however, has not questioned General Electric's
proposed finding that PCBs were present on the wall in the concentrations
stated, but instead has taken the position that even if PCBs were present in
such concentrations, it would still be a violation of the disposal requirements.
See infra at 14, n.25. Accordingly, General Electric's proposed finding is
accepted as reliably stating the results of the Kettering test.
-------
B. Gsrieral Electric immediately began to clean up the debris from the
spill. At that point it was unaware that the spattered oil contained PCBs
and directed its efforts to removing the asbestos. The cleanup included
twice wiping down the wall on which the oil had sprayed'with 1,1",1 - - "
trichloroethane, a solvent that dissolves oil. Tr. 90, 114, 140, 142.
C. Samples of the oil on the wall were taken immediately, after the : .."...
airline rupture and before cleanup for possible future use in investigating
the incident. Tr. 91, 94.
D. During its investigation of the incident in the three weeks following
the airline rupture, General Electric discovered that PCBs had been used in
the compressor between 1953 and 1971. It then took a portion of the'oil
samples it had taken before cleanup and submitted them to DuBois Testing
Service and Kettering Laboratory for testing. Tr. 91.
E. The results of the tests were reported on March 22, 1982. The sample
analyzed by Kettering Laboratory disclosed 84,460 ppm PCBs. The sample
analyzed by DuBois Testing Service disclosed 60,000 ppm PCBs. Tr. 117;
Respondent's Exhibits 1 and 2.
F. When the test reports were received confirming the presence of PCBs
in the oil, General Electric had already disposed of the debris and cleanup
materials in an asbestos landfill, which was not approved for the disposal
of PCBs. Tr. 116-17.
G. On March 23 or March 24, 1982, General Electric informed Tom Winston,
Chief of the Southwest District Ohio Office of the State EPA about the disposal
of the PCB contaminated material. Mr. Winston recommended that General Electric
call the Chief of the Waste Management Branch, EPA, Region V. Tr. 100, 123, 130.
H. On March 25, General Electric called EPA, Region V, and was referred to
Mr. David Homer. The substance of the conversation with Mr. Homer dealt with
-------
6
G.r.sral Hl'Vctric having disposed of the debris end ."Stc-rials fro:n the
cleanup in t'.'.e .isbos'ccs landfill. Kr. Ko:.;or -,.'as ^pparently told th-at
"the discolored areas v;ere wiped clean." In fact, however, there was
still an oily residue visible on the wall. Respondent's Exhibit 3;
Complainant's Exhibit 5; Tr. 12, 19. ' . " =
I. Mr. Homer,.on being told by General Electric that the amount of
oil discharged by the rupture was 2-3 quarts, and contained 7% PCBs
(equivalent to 70,000 ppm), said that the overall concentration in the " ,
debris and.cleanup materials was around 20 ppm, and that the EPA would take no
action with respect to the disposal of the debris and cleanup material. He
stated, however, that if General Electric found anymore oil that the contractor.
had missed, this should be cleaned up and the materials involved be sent to an
Annex II landfill. Tr. 130-131; Complainant's Exhibit 5; Respondent's Exhibit 3.
J. No further cleanup of the wall was done and the oil stains seen by the
EPA inspectors on the wall were what remained from the spill after General
Electric had finished it's asbestos cleanup. Tr. 114-15.
12. Subsequent to the issuance of the complaint in this case, General Electric
was advised by the EPA at a settlement conference to undertake a further clean-
up of the PCBs on the wall. Tr. 92, 100-01, 113-15, 117-18.
13. This second cleanup was done in August 1983. It required first stripping
the paint from the wall, which had been painted in early 1983, after the EPA's
inspection, as part of a regular maintenance program. The area was then cleaned
with Spic and Span and Freon, a solvent. Tr. 82, 92, 143.
14. After this second cleanup, samples were taken of the affected area which
revealed levels of less than one ppm PCBs. Tr. 144; Respondent's Exhibit 4.
Discussion and Conclusions
The only contested violation is the charge of improperly disposing of
PCBs discharged by the ruptured airline, specifically with not complying with
-------
7
40 C.F.R. section 761.60(d). The relevant provisions are 761.60(d)(l) and (2),
which read as follows: ..
(d) SPILLS. (1) .Spills, leaks,.and other
uncontrolled discharges of.PCBs constitute
the disposal of PCBS. " '
(2) PCBs resulting from the clean-up and
removal of spills, leaks, or other uncon-
trolled discharges, must be stored and
disposed of in accordance with paragraph "...
(a) of this section. 6J
The above provisions have been in effect since September 24, 1982.
Prior thereto the section read-in pertinent part as follows:
(d) SPILLS. (1) Spills and other uncontrolled
discharges of PCBs constitute the disposal of
PCRs.
(2) PCEs resulting from spill cleanup and removal
operations shall he stored and disposed of in
accordance with paragraph (a) of this section.
In order to determine if a spill of PCBs has re-
sulted in a contamination level that is 50 ppm
of PCBs or greater in soil, gravel, sludge, fill,
rubble, or other land based substances, the
person who spills PCBs should consult with
the appropriate EPA Regional Administrator
to obtain information on sampling methods
and analytical procedures for determining
the PCB contamination level associated with
the spill. TJ
For reasons hereafter explained both the prior and present versions
of section 761.60(d), are relevant to the determination of General Electric's
1iability.
6/ 47 Fed. Reg. 37342, 37359 (August 25, 1982). A third paragraph, 761.60(d)
J3), which provides that the disposal regulations do not exempt persons from
any actions or liability under other statutes, is not claimed to be relevant
to this proceeding.
TJ 40 C.F.R. 761.60(d) (1982).
-------
Initially to be decided is what constitutes an improper disposal under
the rule. General Electric argues that a spill is not per se an improper .
8/
disposal but becomes"such if it is not adequately cleaned up. While it
is not at all clear that"this is also the position of the EPA, it is clear -:
that this case would not have been brought if in the opinion of the EPA the
I/
spill had been adequately cleaned up. rhe question, then, is whether the --
cleanup of the spill on the wall was "adequate". General Electric says that
it was because a spill need only be cleaned up to where the residue left
contains less than 50 ppm PCBs. The EPA disagrees and asserts that the
cleanup must be carried to the lowest level below 50 ppm which is practicably
achieveable through the use of normal cleaning procedures, and that was not
done here.
In support of its argument, General Electric relies on the following
statement in section 761.1 of the PCB Ban Rule:
* * * Unless it is otherwise specificlly
provided, the terms PCB and PCBs are used
in this rule to refer to any chemical
substances and combinations of substan'ces
that contain 50 ppm (on a dry weight basis)
or greater of PCBs, as defined in § 761.3(s),
including any byproduct, intermediate, or
impurity manufactured at any point in a
process. Any chemical substances and com-
binations of substances that contain less
than 50 ppm PCBs because of any dilution,
shall be included as PCB and PCBs unless
otherwise specifically provided. * * *
BJ Respondent's brief at 14. Reference in this opinion to the "cleaning
up" of a spill means removing the spilled PCBs or material contaminated
with PCBs from the spill site and disposing of them in an acceptable way.
9/ Tr. 66-67, 70-71; Complainant's brief at 20,.
-------
9
In this case, the evidence discloses that the oil sprayed on the v.'all
contained several thousand ppm PCBs. General Electric accordingly does
not question its obligation under the rule to clean up the sprayed oil. It
_contends, however, that..the. Agency's general ppl_i cy expressed in section
761.1, to regulate only PCBs of 50 ppm or more was also intended to apply - .
to the level of. cleanup .required. The Agency argues that the exclusion for...,.
PCBs in concentrations of less than 50 ppm does not apply because this 1s:_ i
a case where the PCBs were "diluted" by the process of cleaning them off
IP./
the wall. The reference to dilution in the regulation was to instances
where the PCB concentration is reduced by increasing the volume of the PCB
contaminated material, either a liquid or a solid, so as to lower the unit
concentration of PCBs per unit of material, and this also accords with the
H/
ordinary meaning of dilution. The EPA's position, accordingly, that re-
ducing the concentration by removing PCBs from the wall was dilution is
rejected. Examination of the language of sections 761.60(d)(l) and (2)
themselves and their legislative history does disclose, however, that the
50 ppm cut-off does not apply to the clean up of spills of materials or
substances that contain 50 ppm or more PCBs.
Sections 761.60(d) and (d)(2) are in reality two separate provisions.
Section 761.60(d)(l) relates to the spill itself stating that spills and
other uncontrolled discharges constitute the disposal of PCBs. There is
IP/ Complainant's brief at 7-8.
IV See Preamble to PCB Ban Rule, 44 Fed. Reg. 31518, 31521 (May 31, 1979);
See also, Tr. 71, 102. The EPA cites a dictionary definition where "dilution"
is defined to include not only the addition of water or the like but also to
"make fainter", which arguably might include not only the addition of a
"diluent" but also removal of part of the substance. Reply brief at 7. The
most that can be said, however, is that all dictionary definitions of the
word apparently do not agree. See Respondent's reply brief at 5.
-------
10
nothing said about cleanup. Read literally, it would appear to moke spills
and uncontrolled discharges illegal in and of themselves, since they are
not one of the authorized forms of "disposal. Section 761.60(d)(2) re-
lates to the disposal of PCBs resulting from cleaning up and removing the
spilled or discharged PCBs. Prior to its amendment in 1982, section 761.60
(d)(2) also contained language with respect to determining whether the spill
- - VLI
had resulted in a contamination level of 50 ppm or more. That language',.
would appear to refer to the disposal of PCB contaminated materials and not to
a level of cleanup of the spilled PCBs. In any event, that it was not intended
to set a level of cleanup is made clear from the history of the 1982 amendment.
The EPA originally proposed to amend section 761.60(d) by addin.g a
provision that would require that contaminated material resulting from the
spills, leaks and other uncontrolled discharges be cleaned up to prexisting
background levels of PCBs where there is a risk of exposure to water, human
food, or animal feed,.that any.visible signs of PCB contamination must be
I!/
removed, and that in all cases cleanup is required to below 50 ppm PCBs.
The EPA, however, did not adopt the proposal and instead, deleted the second
sentence of section 761.60(d)(2), which referred to testing to determine the
level of PCB contamination resulting from the spill. It explained its
action as follows:
The proposal also contained requirements
for cleanup of PCB contamination resulting
from spills, leaks, and other uncontrolled
discharges of PCBs. Comments in response
to these provisions varied. Some comments
stated that a requirement for level of
cleanup should be set, but that cleanup to
12/ See supra at 7.
13/ 47 Fed. Reg. 17443 (April 22, 1982).
-------
11
a concentration of 50 ppm was alv/ays appro-
priate. Other comments expressed concern
about setting any specific requirements for
level of cleanup at this time and about how ;.-...
these levels would be determined in the
field. Still others approved of the standards
set in the proposed rule.- " '"
The Agency has decided not to include =
language regarding the required level of clean-
up in this final rule.. A part of § 761.20(d)(2)
(formerly § 761.10(d) (2)), which was sometimes -'-
construed as setting a required level of cleanup
has been deleted. 14/ ....
General Electric argues that the Agency's refusal to fix a level of
cleanup shows an intention to require that PCB concentration caused by spill
Ii/
need only be reduced to a concentration below 50 ppm. In fact, however,
the Agency's explanation shows precisely the contrary, namely, that the
Agency was concerned with the undesireability of establishing fixed levels
of cleanup which would be generally applicable to all situations. Indeed,
its reason for deleting the second sentence in section 761.60(d)(2), was to
dispel any implication that there was any such required level of cleanup.
In sum, nothing in the Agency's action or in the language of section 760.61(d),
as amended, suggests that the Agency intended to limit the cleanup of spills
to only where the concentration is below 50 ppm.
The reasonable construction of section 761.60(d), as it now reads and
in light of its history, is that the spill itself of PCBs in concentrations
of 50 ppm or more is an improper disposal, and the cleanup is an element of
V4/ 47 Fed. Reg. 37354 (August 25, 1982),
15/ Respondent's brief at 15.
-------
12
the violation only insofar as it is to be considered in determining the
. 16/
appropriate penalty in a given case. .
General Electric argues that without some objective criterion in the '
regulation fixing.a level of cleanup, the regulation would be void for
U7 -..:/
vagueness. The regulation, however, in making a spill illegal per se
can hardly be called vague. Nor does making the penalty dependent upon the .
circumstances of a particular spill and the efforts made to clean it up
render the regulation too indefinite. To support its claim that due process
requires that specific levels of cleanup must be set, General Electric cites
cases which deal either with the permissible scope of regulation where First
Amendment rights are concerned or with the specificity of the definition of
W
a crime. Such cases are not controlling in determining the scope of
regulations promulgated pursuant to remedial civil legislation such as TSCA.
See Brennan v. Occupational Safety and Health Review Comm., 505 F.2d 869, 872
(10th Cir. 1974). Of course., even in civil legislation a party cannot held to
a standard which it cannot reasonably be be expected to know about. Id at 872.
16/ This construction is consistent with the response which the Agency
made in the preamble to the amended PCB Ban Rule to the comment that
under the amended rule the Agency would charge a party with unauthorized
disposal when. PCBs are spilled or leaked during authorized use of electrical
equipment but prompt cleanup is initiated. The Agency said that it will not
charge a party with a disposal violation if the spill or leak occurs during
authorized use of electrical equipment and adequate cleanup measures are
initiated within 48 hours. 47 Fed. Reg. 37354 (August 25, 1982).
17/ Respondent's brief at 24-25.
18/ Respondent's brief at 24-25.
-------
13
That, however, is not the case here. There is no question but that "
19/
General. Electric ^knew that it must clean up spilled PCBs promptly.
Contrary to what General Electric contends, the EPA is not seeking to hold
.-....-. 2SJ
General Electric:to some unpublished arbitrarily determined standard. -
The EPA refers generally to the requirement that spills be cleaned up to
2V/
"background" levels. The purport of Dr. Clark's testimony and of his . :
memorandum on which the EPA-relies, however, is that spills be cleaned up '
to the lowest level of concentration below 50 ppm PCBs which is practicably
22]
attainable through the use of normal cleanup methods. The record in this
case demonstrates that simply by using a household cleaner, Spic and Span,
and an industrial solvent, Freon, General Electric was able to clean up the
PCBs on the wall to a much lower level of concentration than wh=t was
_23/
originally accomplished. Nor can General Electric's original cleanup be
be taken as a gauge of what would normally be done to clean up PCBs, since
its efforts were directed entirely to the removal of asbestos, and it was only
24/
by happenstance that the PCBs were brought down to a level of below 50 ppm.
In contrast, Dr. Clark testified that the EPA's experience' with other companies
19/ Although the cleanup was undertaken to remove asbestos, General Electric
does not deny that there was an obligation under the PCB Ban Rule to also
clean up PCBs.
20/ Respondent's brief at 21-24.
21/ Complainant's brief at 9.
_22/ Tr. 42-43; Complainant's Exhibit 4.
23/ See Findings of Fact Nos. 12 and 13. The cleanup also required stripping
paint from the walls, but that resulted from General Electric repainting the
wall after the EPA had inspected the facility. Tr. 148.
24/ See Findings of Fact Nos. 10B - 10F.
-------
14
had shown that where the effort was specifically directed to removal of
PCBs, a level of about 10 micrograms per hundred centimeters squared
K/
could be easily achieved. -.-.:
General Electric also argues that requiring a cleanup only to
50 ppm is consistent with the policy seemingly expressed by the Agency"--' ''-
in its preamble to the original PCB Ban Rule (40 Fed. Reg. 31514, 31516
(May 31, 1979), that the burden of cleaning up to a lower level outweighed .
26/
the risks associated with leaving such PCBs'unregulated. In
reading the preamble, however, it is evident that the Agency was concerned
with the fact that it was technically impossible to eliminate the in-
advertent production of PCBs during the manufacturing process, and as the
Agency noted in its proposed rule, it was also concerned with the problem
of regulating the diffuse and extremely numerous PCB sources of concentrations
25/ Tr. 42, Complainant's Exhibit 4. One question in this case which is not
being resolved because it is not necessary for decision, is the appropriate
measurement for the concentration of PCBs on the wall. The EPA uses the ratio
of micrograms of PCBs to the 100 cm^ of the wall area sampled. General Electric
converts the results into ppm by measuring the PCBs wiped off the wall as a
percentage of the 10 ml solvent solution into which the wipe samples were placed.
The concentration so determined would vary with the quantity of solvent solution
used as the denominator of the fraction. See Tr. 28-29, 170-71. The EPA, however,
does not question General Electric's ppm determinations, and it is assumed,
therefore, that they accurately reflect the level of PCB concentration on the
wall and that the final cleanup result achieved of less than 1 ppm was within
the range considered acceptable by the EPA.
26/ Respondent's brief at 18.
-------
15
27/
below 50 ppm already present in the environment. There is no indication
that the EPA considered the particular question involved here, namely, how
should the cleanup of spills and other uncontrolled discharges of PCBs in
concentrations of. 50 ppm or.more be.treated. - .
In promulgating the PCB Ban Rule, the EPA, addressing the question of
what concentrations of PCBs could be considered as significant, stated as
follows:
EPA considered a finite concentration
as the demarcation betv;een "significant" and
"insignificant exposure". The chief reason
for not taking this approach, however, is
that there simply is no rational basis for
selecting any particular exposure level above
zero for the purposes of this regulation. PCB's
are extremely persistent and ubiquitous in the
environment, bioconcentrate and bioaccumulcte
within many organisms, induce a variety of
adverse effects in humans and laboratory mamimals,
and possess no known "no effect" level for some
of these effects. Based on the existing infor-
mation on the environmental risks associated with
exposure.to PCB's (summarized in the .Support
Document), it is apparent that there is no finite
level at which continuing releases in the environ-
ment could be regarded as insignificant. Accord-
ingly, the Administrator has determined that any
exposure to PCB's is significant and shall not be
permitted unless explicitly authorized or exempted. 28/
211 See 43 Fed. Reg. 24804 (June 7, 1978). See also the discussion of
tTTe 50 ppm cutoff in Environmental Defense Fund v. EPA, 636 F.2d 1267, 1279-
1281 (D.C. Cir. 1980). In that case, the court voided the 50 ppm cutoff
finding that the EPA had not shown that it had sufficiently considered
whether the cutoff provided adequate protection for human health and
the environment. 636 F.2d at 1284.
Preamble to the proposed rule, 43 Fed. Reg. 24805 (June 7, 1978). The
EPA adhered to this reasoning in its final rule. See 44 Fed. Reg. 31518
(May 31, 1979). The concerns expressed about the hazards of any exposure
to PCBs were reiterated in Dr. Clark's testimony'. See Tr. 40-42.
-------
16
i
In view of the policy expressed therein, the 50 ppm cutoff should not
: i
be construed as applying to situations which result in adding PCBs to the
environment unless it is clear that the EPA so intended. Here it is neither
clear from the spill provisions themselves nor from their history that the
EPA intended this" result."".--" - . .
Accordingly, it is concluded that the spilled PCBs found on the .wall:...
Jit the time of inspection had not been disposed of in accordance with the
2SJ :
requirements of 40 C.F.R. 761.60(d).
The Penalty
The statutory criteria for assessing penalties under TSCA, section 16(a)
are listed in section 16(a)(2)(B), 15 U.S.C. 2615(a)(2)(B), which provides
as follows:
In determining the amount of a civil penalty, the Administrator
shall take into account the nature, circumstances, extent, and
gravity of the violation or violations and, with respect to the
violator, ability to pay, effect on ability to continue to do
business, any history of prior such violations, the degree of
culpablity, and such other matters as justice may require.
To provide guidance on the assessment of penalties under section 16,
the EPA enforcement staff has issued guidelines setting forth the general
policies it will follow and has supplemented these guidelines with a
30/
specific policy for assessing penalties for violations relating to PCBs.
29/ The EPA has claimed no violation with respect to the spilled PCBs which
were cleaned up and disposed of in the asbestos landfill. This is undoubtedly
in accordance with the advice given by the EPA to General Electric that it
would take no action with respect to that disposal. See Complainant's
Exhibit 5; Respondent's Exhibit 3.
JO/ See 45 Fed. Reg. 59770-59783 (September 10, 1983). The guidelines and
penalty policy are also included in the record as Complainant's Exhibit 3.
Reference, however, will be to the Federal Register pages.
-------
17
The procedural rules for these proceedings require that I consider the
1
guidelines and PCB penalty policy in determining the appropriate penalty,
.1
and that if I assess'a penalty different in amount from that proposed in
: -.. ..... . 1L/
the complaint, I must give my reasons therefore. . . .-: = -:
The PCB penalty policy uses a matrix to establish an initial .penalty..
based on the nature, extent, circumstances, and gravity of the violation.
i - ' -
The initial penalty can then be adjusted upwards or downwards depending
upon consideration of the other statutory factors, i .e._, culpability,
history of such violations, ability to pay, ability to continue in business,
3Z/
and such other matters as justice may require.
For the violations charged in the four counts of the complaint, the
EPA has requested a total penalty of $20,000, broken down as follows: A
penalty of $1,500 for improper storage (Count I), $500 for improper marking
(Count II), $1,000 for improper recordkeeping (Count III), and $17,000 for
improper disposal (Count IV). The only penalties questioned by General
Electric as excessive are the $1,000 penalty for improper marking and $17,000
33/
for improper disposal. General Electric has not, however, raised any issue
x
with respect to its ability to pay such penalties or claimed that payment
would adversely affect its ability to continue in business.
The improper recordkeeping violation concerned General Electric's failure
to show the date on which one 55-gallon drum of PCB solids was removed from
service, the date it was placed in storage for disposal, and the total
J31_/ 40 C.F.R. 22.27(b).
32/ 45 Fed. Reg. 59777.
337 Respondent's brief at 2.
-------
18
) 347
weight in kilograms of PCBs. The EPA classified this as a major record-
keeping violation (in assessing the probability of causing damage), but of
--... 35/
minor extent because of the relatively small amount of PCBs involved.
General Electric claims that the penalty is excessive since the drum itself
.and its contents were identified, they were only a small part of the PCBs
handled, and General Electric did comply with respect to the other PCBs
_36/
handled by it.
The information in the annual document is required to assist the EPA
in determining compliance with PCB requirements and to assist owners and
operators in maintaining effective inventory control of PCBs and insuring
37/
timely disposal. It seems self-evident that the date a PCB container
has been removed from service and the date it has been placed in storage
for disposal are important for both the EPA and General Electric in
determining whether it was being handled in accordance with the PCB Ban
38/
Rule's requirements. The weight of the PCBs in kilograms is also
important in determining whether all quantities of PCBs shown in the annual
report have been accounted for. Consequently, the violation was properly
34/ Finding of Fact No. 5.
35/ Complainant's Exhibit 10.
36/ Respondent's brief at 10-11.
37/ See preamble to proposed disposal and marking rule, 42 Fed. Reg.
26570 (May 24, 1977); Bell and Howell Co., (TSCA-V-C-033, 034, 035)
(Final Decision, December 2, 1983) at 8.
38/ The PCB Ban Rule, for example, has different disposal requirements for
PCB containers stored before January 1, 1983, than for those stored
afterwards. 40 C.F.R. 761.65(a). Also the date a PCB container has been
removed from service is important in determining whether the temporary
storage requirements have been complied with. See 40 C.F.R. 761.65(c)(l).
-------
19
classified as a major recqrdkeeping violation. It is true as General Electric
points out, that the penalty policy gives as an example of a minor recordkeeping
i &
violation the "omission of the date of transfers of PCBs." There
is no reason to_assume .from this that the EPA would also consider the .:.. :..
omission of the'total .weight of PCBs as minor. Further, it is highly
questionable whether this was intended to refer to the omission of such -
significant information as the dates of removal of an item from service
and of placing it in storage. In fact, there is no reference to the
"transfers" of PCBs in the records required of owners and operators of
facilities, although there is such a reference in the records required
40/
from disposal and storage facilities.
I also find that General Electric has not shown any reason why the initial
penalty set by the penalty policy should be reduced because of any mitigating
circumstances. No explanation for omitting the information is given other than
one which General Electric makes for the first time i-n its brief that the
drum was used to hold PCB contaminated items from transformer servicing and
4V
cleanup that occurred periodically. Assuming this is true, perhaps some
variation in the way the information was reported in the annual document
might have been in order. It would not justify omitting all information about
the dates the PCBs were removed from service or stored for disposal, which is
what General Electric appears to have done.
I find, accordingly, that $1,000 is the appropriate penalty for the
recordkeeping violation.
_39/ General Electric's brief at 11. See 45 Fed. Reg. 59780.
_40/ See section 761.80(b) (2).
41 / Respondent's brief at 10.
-------
20
J
With respect to the disposal violation, the EPA classifies the violation
as significant in extent of potential damage and at the highest level in
42/
terms of probability of damage. The significant category was arrived by
estimating that the contaminated area of wall was between 150 square feet
437
and 750 square feet. Under the penalty policy all disposal violations, are
.447
assigned the highest level, i.e. considered as most likely to cause damage.
The category into which the violation falls is based upon both the
concentration of PCBs and the amount. The EPA considered only the extent
of the contaminated wall and that it was located in an occupied work area,
_45/
but did not attempt to ascertain exactly how much PCBs were involved.
General Electric correctly points out that by so doino , the EPA was not
^67
properly applying the penalty policy. The policy states that when
different measurements of quantity would result in a particular violation
falling into more than one category, the category should be determined by
il/
the actual weight in kilograms if this information is known. The EPA
48/
argues that it had no way to reliably measure the weight of PCBs involved.
I find, however, that that argument is not supported by the record and
42/ Complainant's Exhibit 10.
_43/ Tr. 66.
44/ 45 Fed. Reg. 59778. See also explanation for levels of probability of
damage in the TSCA guidelines, 45 Fed. Reg. 59772.
45/ Tr. 67-68, 73-74, 77.
46_/ Respondent's brief at 27-28.
£77 45 Fed. Reg. 59779.
48/ Complainant's reply brief at 11.
-------
21
that there was information from which the EPA could have ascertained the
weight in kilograms for purpose of determining the proper penalty matrix.
Measurements made by General Electric at the time of the spill indicated that
49/
less than ten pounds of oil containing about 75,000 ppm PCBs were spilled.
This would amount to a quantity considerably below the 1,000 kilogram level
5_0/
which separates the minor from the significant category. The quantity of
PCBs not originally cleaned up would be even smaller and probably very much -
517 '
smaller, given the concentration found on the wall of of 13 ppm. True
there is the possibility that some of the PCBs may have volatilized between
March 1982, when the original cleanup was completed, and October 1982, when
527
the inspection occurred. Nevertheless, the concentration of PCBs
regaining on the wall after the original cleanup was still undoubtedly jvjch
497 Tr. 92-94; Complainant's Exhibit 5. In its conversation with Mr. Homer
FT the EPA, General Electric stated that it estimated the amount of oil
spilled to be two to three quarts. Complainant's Exhibit 5. The quantity
categories in the penalty policy are based on the assumption of an average
density of PCB fluids of 10 Ibs. per gallon. 45 Fed. Reg. 59779. Using that
assumption, the spill would have amounted to between 5 and 7.5 pounds of oil.
50/ 45 Fed. Reg. 59777. One pound is approximately equal to 0.45 kilograms.
See U.S. Department of Commerce, National Bureau of Standards, NBS Letter
Circular 1051, Rev. Sept. 1976.
51/ Finding of Fact No. 9.
52/ Ms. McKinley testified that there would be no volatilization of PCBs
because of their low vapor pressure. Tr. 99-100. Dr. Clark pointed out,
however, that also affecting the ability of PCBs to volatilize besides their
vapor pressure is the extent of surface area exposed and the size of environ-
ment. Tr. 49.
-------
22
closer to that found at the time of inspection, than to the original
53/
, concentration of 75,000 ppm. While it would seem more logical to measure
i
' the extent of potential damage by the quantity of PCBs not cleaned up rather
*. than by the original quantity spilled, that question need not be resolved- -'- --
-i
/ since in either case'the quantity was less than 1,000 kilograms."-" - ------ ,
The burden is on the EPA to prove that .its proposed penalty is
54/
appropriate. Here the EPA seeks to justify its penalty on the grounds that :
it is in accord with the penalty policy. I find, however, that under the
penalty policy, this violation should be classified as minor in extent of
potential damage, rather than significant, and as such, the initially determined
_55/
penalty should be $5,000 and not $17,000.
I also find that there are mitigating circumstances which justify a re-
duction in the initially determined penalty. The TSCA penalty guidelines
in accordance with the statutory standard, provide that consideration may also
be given to the violator's culpability, or lack thereof, which includes the
violator's knowledge of the potential hazards of its conduct and its
_56/
attitude. The EPA would appear to characterize the violation as one
1Z/
evidencing total disregard of the law and of the inherent dangers of PCB.
Although General Electric was mistaken as to its obligation under the rules
with respect to cleaning up spills, the circumstances do not support the EPA's
5_3/ The EPA does not dispute that the original cleanup resulted in removing
some of the spilled PCBs. Also, it seems clear that PCBs are not highly
volatile. Tr. 49, 99-100.
_54/ 40 C.F.R. 22.24.
557 45 Fed. Reg. 59777.
_56/ 45 Fed. Reg. 59773.
57/ Complainant's brief at 21.
-------
23
characterization of General Electric's conduct. In view of the treatment in
the PCB Ban Rule of PCBs in concentrations of less than 50 ppm, General Electric
did have some basis for assuming that it was under no obligation to clean up
the residue left on the wall after the original cleanup. So far as I know, this .
is the first case to squarely consider the question of whether the 50 ppm.cut-off
I?/ -
applies to the cleanup of spills. Also to be considered is that General
Electric on being requested to further cleanup the wall-did so and brought the
remaining PCBs down to a level found satisfactory by the EPA.
The penalty policy would apparently allow no downward adjustment for a
violator who lacked sufficient knowledge of the potential hazard created by his
conduct, unless he also lacked control over the situation to prevent occurence
_59/
of the violation. I am not sure that that language is necessarily applicable
to a situation where the violator's belief that its conduct did not create a
potential hazard has some basis for it, as appears to be the case here. Con-
sequently, taking into account both General Electric's reasons for not cleaning
up the spill completely and the fact that it acted promptly and thoroughly to
correct the violation, I find that the initially determined penalty should be
reduced 25% and that $3,750, is the appropriate penalty for this violation.
58/ The EPA brief at 8, cites language in Judge Jones' opinion in Electric
Service Co., TSCA-V-C-024 (Initial Decision, August 10, 1982), at 25, to the
effect that where a discharge of over 50 ppm PCBs occurs, contamination which
through the process of dilution, reduces the level to below 50 ppm, is still
regulated by the PCB Ban Rule. The case, however, does not appear to have
dealt the question of whether reducing the concentration of PCBs by removing
them in a cleanup constitutes dilution.
59/ 45 Fed. Reg. 59773.
-------
24
Accordingly, it is concluded that a total penalty of $6,750, should be
assessed for the violations found in this case.
60/
ORDER
Pursuant to section 16(a) of the Toxic Substances Control Act (15 U.S.C.
2615(a)), a civil penalty of $6,750 is hereby assessed against Respondent
General Electric Aircraft Engine Group, for the violations of the Act found
herein.
Payment of the full amount of the civil penalty assessed shall be made
within sixty (60) days of the service of the final order upon Respondent by
forwarding to the Regional Hearing Clerk a cashier's check or certified check
:.3vable to tht United States of Series.
Gerald Harwood
Administrative Law Judge
January 27, 1984
60/ Unless an appeal is taken pursuant to section 22.30 of the rules of
practice or the Administrator elects to review this decision on his/her
own motion, the Initial Decision shall become the final order of the
Administrator (See 40 C.F.R. 22.27(c)).
-------
29
-------
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of )
)
Cotter Corporation, )
Schwartzwalder Uranium Mine, ) Docket No. PCB-81-004
)
Respondent )
Toxic Substances Control Act
A leak from the draincock of a transformer is not a "spill" or "disposal"
where PCBs do not find their way to the ground in such an amount and concen-
tration as to eventually contaminate the environment or pose a hazard to man
or terrestrial or aquatic organisms.
Toxic Substances Control Act
Direct evidence that the surface of a container is in direct contact
with PCBs in order to qualify the container as a "PCB Container" is not
essential when, under the facts, it would be unrealistic to find otherwise.
Toxic Substances Control Act
The marking of the area where transformers are located does not constitute
the required marking of the transformer itself.
Toxic Substances Control Act ~
Removal of capacitors from use does not constitute removal from service
in the absence of direct evidence that they are PCB capacitors and are
intended for and have been stored for disposal.
-------
Appearances:
For Respondent:
Edward J. McGrath, Esquire
Charlotte L. Nietzel, Esquire
Holme Roberts & Owen
1700 Broadway
Denver, Colorado 80290
For Complainant:
Stephen B. Cherry, Esquire
Kent B. Connelly, Esquire
David J. Janik, Esquire
Environmental Protection Agency
1860 Lincoln Street
Denver, Colorado 80295
-------
INITIAL DECISION
I. This is a civil penalty proceeding initiated under Section 16(a) of the
Toxic Substances Control Act (TSCA), 42 U.S.C. Section 2615(a). This proceed-
ing was commenced pursuant to the issuance of a Complaint by Director,
Enforcement, Region VIII, Denver, Colorado, against Cotter Corporation
(Cotter). The Complaint in this matter alleges that Cotter violated certain
provisions of TSCA and Environmental Protection Agency (EPA) regulations
promulgated pursuant to Section 6(e) of TSCA (42 U.S.C. Section 2605(e)).
Specifically, it is alleged that Cotter violated the marking, storage, disposal,
and record keeping provisions of TSCA and EPA's polychlorinated biphenyl (PCB)
I/
regulations at Cotter's Schwartzwalder Uranium Mine. Based upon the
alleged violations, in its Complaint EPA proposed a civil penalty of $106,950.
The original Complaint in this matter, filed on April 23, 1981, and an
Amended Complaint filed on April 30, 1981, were filed against Cotter Corp-
oration and Commonwealth Edison Company. On May 20, 1981, Answers, Requests
for Hearing, and Motions to Dismiss were filed by both Respondents. After
response by Complainant, Respondents' Motions to Dismiss were denied on
June 26, 1981.
On September 10, 1981, the parties filed a Stipulation whereby it was
agreed that Complainant would move to dismiss this action as to Commonwealth
Edison Company in exchange for a commitment by Cotter Corporation that it
would not raise as an issue in this matter inability to pay the proposed
77Section 2614 of the Act (15 U.S.C. 2614) provides in pertinent part:
"It shall be unlawful for any person to - (1) fail or refuse to
comply with (A) any rule promulgated or order issued under Section 4,
(B) any requirement prescribed by section 5 or 6, or (C) any rule
promulgated or order issued under section 5 or 6; ."
PCB rules were issued under section 6(e) (15 U.S.C. 2605(e)).
-------
- 2 -
penalty. In accordance with instructions and pursuant to Section 22.19
of the "Consolidated Rules of Practice Governing the Administrative
Assessment of Civil Penalties and the Revocation or Suspension of Permits"
(Consolidated Rules), 40 C.F.R. Section 22.19, on September 11, 1981, the -
parties made a prehean'ng exchange of information. As agreed in the
September 10, 1981 Stipulation, on September 17, 1981, Complainant filed
a Motion to Dismiss Respondent, Commonwealth Edison Company. That Motion
was granted on October 8, 1981. On September 17, 1982, a Motion for
Leave to Amend Answers was filed by Cotter. After response by Complainant,
that motion was denied on October 7, 1982. A subsequent Motion to Certify
the Order of the Presiding Officer Denying Motion for Leave to Amend
Answer for Appeal to the Administrator and a Motion for Administrator to
Review Order also were denied.
On March 29, 30 and 31, 1983, hearing was held in Denver, Colorado.
During a prehearing conference, the parties stipulated to the dismissal
of Counts II and IV, the alleged marking violations at substation 4160
($11,500.00), and the alleged marking violations concerning line material
company transformers ($11,500.00). Also stipulated was the admissibility
of the Federal Mine Safety and Health Administration (FMSHA) citations
(Cotter Exhibits 1-4), the presence of a PCB mark on the fence outside
substation 2300, and to the absence of a PCB mark on the PCB transformer
located inside substation 2300.
Upon completion of the hearing, at the request of Complainant, the
-record was held open for further proceedings. On June. 22, 1983, upon
Complainant's Motion, the record was ordered closed. A post hearing Motion
to Strike and Not Admit Evidence Relating to the EPA Rebuttal Case concern-
ing contamination of the ground behind the compressor shed was filed by
-------
- 3 -
Respondent. Since the rebuttal submitted by Complainant at the hearing,
and which was the subject of this motion to strike, was incomplete and
not subject to cross-examination, said Motion was granted on July 28,
1983.
Based upon the entire record, including the briefs and proposed
findings and conclusions of the parties, I find that the following facts
are established.
FINDINGS OF FACT
1. Respondent, Cotter Corporation, maintains a place of business,
the Schwartzwalder Uranium Mine, near Golden, Colorado.
2. On July 25, 1980, an anonymous complaint was received by personnel
at the Lakewood Colorado office of the U. S. Mine Safety and Health Admin-
istration (MSHA) regarding the improper storage of PCBs at Respondent's
Schwartzwalder Uranium Mine.
3. On July 25, 28, and 29, 1980, inspections were conducted of the
Schwartzwalder facility by Mr. Michael L. Lynham of MSHA.
4. On September 17, 1980, an EPA inspection was conducted of
Respondent's facility to determine compliance with the PCB manufacturing,
processing, distribution in commerce, and use prohibitions.
5. EPA Participants in the inspection were Mr. Daniel W. Bench,
Mr. Paul Hanneman, and Ms. Marilyn Longan.
6. Written notice was provided to Respondent prior to the inspection.
7. A single transformer and a bank of capacitors were located at
substation 2300.
-------
- 4 -
8. A manufacturer's nameplate on the single transformer located in
substation 2300 indicated that the transformer contained 430 gallons of
Inerteen dielectric fluid.
9. Inerteen is the brand name of a PCB dielectric fluid.
10. EPA analysis of a sample from a spill below the draincock of
the transformer located in substantion 2300 showed there to be 260,000
parts per million PCBs in the spilled material.
11. Respondent's laboratory analysis of a split of the EPA sample
taken of the spillage below the draincock of the transformer in sub-
station 2300 showed there to be 11,000 parts per million PCBs in the spilled
mate.ri al.
12. There was no PCB marking on the transformer located at substation
2300.
13. Marking the fence surrounding the area where an in use transformer
is located does not constitute the required marking of the transformer
itself.
14. A leak from the draincock of a transformer is not a "spill" or
"disposal" where PCBs do not find their way to the ground in such an amount
and concentration as to eventually contaminate the environment or pose a
hazard to man or terrestrial or aquatic organisms.
15. On February 11, 1980, a fire occurred in the compressor shed at
the Cotter facility.
16. The fire in the compressor shed resulted in the spillage of PCBs
from a PCB capacitor located in the compressor shed.
-------
- 5 -
17. The capacitor damaged during the February 11, 1980, fire
contained 26% (260,000) parts per million PCBs.
18. Material from the fire cleanup was placed in a red drum which, at
the time of MSHA and EPA inspections, was located in an open area near a
trailer house.
19. Included in the fire cleanup material placed in the red drum were
PCB-contaminated soils from behind the compressor shed, PCB-contaminated
debris from inside the compressor shed, PCB-contaminated rags, and protective
clothing worn by Cotter employees during the cleanup.
20. The red drum was a PCB container and was not labeled with a PCB
mark or other notation indicating the presence of PCBs in the drum.
21. The red drum and its contents were stored for disposal and were not
stored in a prescribed storage facility, nor was the area labeled with a PCB
mark.
22. The red drum was undated.
23. The residue of PCBs at the point of the draincock in the transformer
at substation 4160 was not a spill or improper disposal. See Finding No. 14,
supra.
24. Fact that capacitors were out of use at substation 800 does not
lead to conclusion that capacitors were out of service and, therefore,
improperly stored.
25. Evidence that the two capacitors at substation 800 were PCB
capacitors was insufficient.
26. During the course of the cleanup from the February 11, 1980, fire
in the compressor shed, material was "washed out" the back of the compressor
shed.
-------
- 6 -
27. EPA analysis of a sample taken from a depression in the ground
immediately behind the compressor shed disclosed the presence of 19,000
parts per million PCBs.
28. The "wash out" of the PCB spill at the compressor shed constituted
a spill and improper disposal of PCBs.
29. The "bone yard" was a "junk yard" containing discarded barrels,
cars, trucks, and unused and unserviceable capacitors.
30. The black drum located in the bone yard was a PCB container and
was not marked.
31. The six PCB capacitors in the black drum were out-of-service
and were designated for disposal.
32. The capacitors in the black drum were neither marked nor stored
in an appropriate facility. The black drum was not labeled with a PCB
mark.
33. The two large G. E. Pyranol capacitors on the ground, five addi-
tional large G. E. capacitors on the ground, and two capacitors in a
discarded panel box, all in the bone yard, were all PCB capacitors which
had been removed from service, were not properly marked, and were improperly
stored for disposal.
34. The bone yard area itself was not marked with a PCB label as
required.
35. Respondent had not developed and maintained records required by
Section 761.45(a) of the PCB regulations.
-------
- 7 -
Substation 2300 (Counts I and X).
At substation 2300, Respondent is alleged to have violated both the
marking and disposal requirements of the PCB regulations (Sections 761.20(a)(2)
or (c)(l) and 761.10(a)(l)).
Count I- Marking of Transformer at Substation 2300.
There is no dispute that a transformer located at substation 2300 bore
a manufacturer's nametag identifying it as a PCB transformer and that high
levels of PCBs were present in that transformer's dielectric fluid (Answer,
p. 9) (Bench Tr., p. 109) (Comp. Ex. 5) (Resp. Ex. 16). Furthermore,
Respondent admits that the transformer itself was not marked with an appro-
priate PCB mark (Answer, p. 9) (Tr., p. 6). As a result, it is alleged that
Respondent violated Section 15(1 )(C) of TSCA and Section 761.20(a)(2) or
(c)(l) of the PCB regulations.
Respondent Cotter does not contest that the transformer contained more
than 500 ppm and thus was required to be marked. It does, however, contest
the allegation that the transformer was not marked. Respondent asserts
that it did not violate Section 761.20(a)(2) or (c)(l) because the locked
gate leading into the protected location of the transformer in the substation
was marked with a PCB label.
Respondent argues at length that Answer 78 of "EPA's Final Ban Rule:
Over 100 Questions & Answers to Help You Meet These Requirements" (June
1980), Cotter Exhibit 6 , "Q and A Document") indicates that a PCB label
can be placed on a gate leading into a protected area. It reads:
All labels (or marks) are to be put on the exterior of
PCB items and transport vehicles in a place that can be
easily seen or read by anyone inspecting or servicing
them. Q and A Document at 22.
-------
- 8 -
Respondent argues further that "PCB Item" is defined to include any
"PCB Article Container" or "PCB Container," 40 C.F.R. § 761.2(x). The
two terms mean, generally, any "device" used to contain "PCB Articles."
40 C.F.R. § § 761.2(u), (v). "PCB Article," in turn, is defined to
include transformers. 40 C.F.R. § 761.2(t). Therefore, these definitions
indicate that a "PCB Item" can be construed to be a substation which enclosed
a PCB transformer. Thus, Respondent asserts that placement of a PCB label on
the outside of the substation complies with Answer 78.
Question 79 and answer of the Q and A Document harmonize with this
reading. They state:
Do I have to label a PCB Capacitor that is on a pole
or in a similar inaccessible location?
If a PCB capacitor is installed in a "protected area"
(e.g., on a power pole, structure or behind a fence),
the pole, structure or fence is to be labelled in a
place easily seen by interested persons, such as
servicemen. Q and A Document at 23.
The record in this case shows that the 2300 substation was a protected
area labelled with a PCB sign. The parties stipulated prior to the hearing
that a PCB label was on the gate leading into the substation. Tr. at 6, 7.
A heavy gauge cyclone-type fence about seven feet tall completely encircled
the substation. Tr. at 172, 437. Three strands of barbed wire surrounded
the top of this fence. Tr. at 437. The gate was kept locked and was
locked on the date of the EPA inspection. Tr. at 145, 172. Mr. Allen, an
employee of Respondent, had the only keys to this gate. Tr. at 437.
Respondent argues that nothing in the Q and A Document suggests that
Answer 79 could not apply to transformers as well as to capacitors, thus
-------
- 9 -
indicating that a transformer located behind a "protected area can be
labeled on a gate, a place easily seen by interested persons. I disagree.
This answer relates to capacitors and not transformers, and even then, only
when they are behind a fence and inaccessible. This transformer was not .
inaccessible.
Respondent further argues that its good faith effort to comply with
the PCB labeling regulations at Substation 2300 should be given great weight.
Respondent argues that the record reveals that Cotter had made a good faith
effort to comply with the marking rule prior to the EPA inspection. Mr. Allen
testified that he relied on Answer 79 in the 0 and A Document when he
placed the PCB label on the gate, rather than on the transformer. Cotter
Exhibit 6 is a copy of Allen's marked-up version of the 0 and A Document,
which shows the mark he made by Answer 79 when studying it in August of
1980. He testified that he made the arrow by this answer "because it was
significant to this area [substation 2300]." Tr. at 437. Mr. Allen
interpreted the answer to apply to transformers, as well as to capacitors,
because he "didn't see any relative difference" between transformers and
capacitors located in inaccessible and protected locations. Tr. at 437-38.
According to Mr. Allen, he "placed it on the gate rather than the transformer
because it was in a contained area, and anyone entering could be sure to see
the sign." Tr. at 437.
The record also reveals that Respondent took corrective action with respect
to marking at Substation 2300 shortly after the inspection. Mr. Allen testified
that one of the inspectors told him that the PCB label on the gate should have
been on the transformer. Tr. at 424. Mr. Allen placed a PCB label on the
transformer "within a few days after the inspection." Tr. at 439.
-------
- 10 -
From a factual standpoint, it is clear that the fence surrounding Sub-
station 2300 was substantially removed from the one PCB transformer inside
that substation.
Marking the area where a transformer is located does not constitute
marking the transformer itself. The PCB regulations draw a definite
distinction between an "area" and a specific item or article (see Section
761.20(10) May 31, 1979, where, in addition to the marking requirements,
for the transformer itself, the regulations require that each "storage
area" used to store PCBs and PCB items for disposal" be marked. Unless
the PCB article itself is marked, there is no way that the public in
general, or an employee in particular, can assess where the danger from
PCB exposure may be.
In this particular case, the dangers of marking a fence surrounding a
substation as opposed to the enclosed PCB transformer itself must be considered.
Unless an employee or other person entering Substation 2300 specifically knew
that the PCB article in that substantion was the center transformer, they
could have come in contact with PCB oil which had spilled from that trans-
former without ever knowing that it was PCB oil.
Respondent attempts to bolster its argument that marking the area is as
good as marking the article by citing the Q and A Document. However, in
citing the Q and A Document, Respondent misinterprets the language of
Question and Answer 78, fails to cite the specific question and answer
dealing with the marking of PCB transformers, and overlooks an important
caveat set forth on the very first page of "Questions and Answers." The
-------
- 11 -
answer to Question 78 states quite clearly that the mark goes on "the
exterior of PCB Items." A whole substation cannot be deemed
to be a "PCB Item."
Although Respondent is correct when it says that the definition of
PCB Item (761.2(x)) includes PCB Article Container or PCB Container,
Respondent is incorrect when it argues the definitions of PCB Article
Container and PCB Container mean, "generally, any 'device1 used to contain
PCB articles." (Respondent's Initial Brief, page 9). The definition of
both PCB Article Containers and PCB Articles include the following sorts
of containers: "any package, can, bottle, bag, barrel, drum, tank, or
other device. ..." A "substation" does not fall within this category
of "containers" or "articles."
The answer to Question 76, on the very same page, is directly on
point:
76. DO ALL TRANSFORMERS CONTAINING PCBs HAVE TO BE
LABELED?
PCB transformers, containing (sic) 500 ppm or greater
PCB, are required to be labeled. . . .
The significance of that Q and A Document must be kept in context. As
the caveat on page 1 states:
This Booklet has been prepared by the Industry Assistance
Office and the Chemical Control Division with EPA Office
of Toxic Substances. It is an informal document, and
persons are directed to the PCB Final Rule for specific
legal requirements, (emphasis added)
Respondent's argument that its actions comported with its understanding
of the "Questions and Answers" are rejected.
-------
- 12 -
Respondent's argument that "it made a good faith effort to comply with
the marking rule" and as a result should not be penalized, must also be
rejected. The Toxic Substances Control Act was signed into law on October 11,
1976, and became effective January 1, 1977. EPA first promulgated PCB
regulations applicable to Respondent's facility on February 17, 1978. (43 F.R.
7150) Under these regulations, as well as EPA's May 31, 1979, PCB regula-
tions, all PCB transformers were to be marked no later than January 1, 1979.
Sometime in August 1980, only after Mr. Bench of EPA took the initiative of
sending the Q and A Document and the PCB regulations to Respondent's
Mr. Vanlaninghan did Respondent's representative place a mark in the vicinity
of the PCB transformer. (Allen Tr., p. 415-419 and 437-438).
Count X - Disposal at Substation 2300
During EPA's September 17, 1980, inspection, PCB residue was observed
below the draincock of the PCB transformer located in Substation 2300 (Bench Tr.,
p. 108) (Hanneman Tr., p. 172). The residue was on an unbermed concrete pad
and completely exposed to wind, rain, and other weather (Hanneman Tr., p. 173-
174). A sample of the residue was taken by the EPA inspectors and "split"
with Respondent. Both EPA's and Respondent's analyses of the split sample
established that the residue contained high levels of PCBs. The EPA analysis
showed there to be 260,000 ppm PCB and the Cotter analysis showed there to be
11,000 ppm PCB (Comp. Ex. 5) (Resp. Ex. 16). Regardless of which analysis
is relied upon, it is obvious that there was a significant PCB residue on the
concrete pad. Complainant alleges that this constitutes a "spill" and,
therefore, improper disposal of PCBs constituting a violation of Section
-------
- 13 -
EPA relies on Section 761.10(d)(l) of the PCB regulations in asserting
this violation, which reads:
Spills and other uncontrolled discharges of PCBs
constitute the disposal of PCBs.
Two EPA administrative decisions, however, suggest that this provision cannot
create liability for the type of leak encountered at Substation 2300. In re
Liberty Light & Power, TSCA No. VI-8C (Decision by Administrative Law
Judge Thomas B. Yost, April 7, 1981), aff'd, TSCA Appeal No. 81-4 (Decision
by Judicial Officer Ronald L. McCallum, October 27, 1981); In the Matter
of National Railroad Passenger Corp. (AMTRAK), TSCA No. VI-24C (Decision
by Administrative Law Judge Gerald Harwood), rev'd. TSCA appeal, No. 82-1
(Decision by Judicial Officer McCallum, April 27, 1982).
Liberty Light dealt with a situation similar to the one at issue here.
In Liberty Light, "a small quantity of PCBs leaked from a stored PCB
capacitor onto a supporting concrete pad." The concrete pad, which had
no curbing, was outdoors with no roof or walls. The percentage of PCBs
found in a sample taken from dirt and debris under the capacitor "was
rather high." The EPA inspector observed no flow from the leak. Judge
Yost pointed out in his Initial Decision that EPA presented no evidence
to show that the oily substance ever left the immediate area of the
capacitor or ran off the concrete pad. Neither has there been such a
showing here.
Judge Yost held that a leak on concrete was not a spill within the mean-
ing of the PCB regulations. He reasoned that the PCB regulations envision a
"spill" as "an event where PCBs find their way to the ground in such an amount
-------
- 14 -
and concentration as to eventually contaminate the environment or pose a
hazard to man or terrestrial or aquatic organisms."
Judicial Officer.McCallum, in affirming Judge Yost's decision, in the Final
Decision, provided an extended rationale as to why a leak should not trigger
disposal liability under the PCB regulations. According to Judicial
Officer McCallum, "the language of the regulations is unclear and misleading,
and as a consequence, it would be manifestly unfair to impose a monetary
penalty on anyone who failed to interpret the regulations in a manner advocated
by complainant." And that, while EPA specifically defined the term
"leak," see 40 CFR § 761.2(m), it did not include this word under the
definition of "disposal." See 40 CFR § 761.2(h). The final decision
rejected EPA's argument, which was based on Section 761.10(d)(l), the same
provision cited in the EPA Complaint against Respondent here. According to
Judicial Officer McCallum, Section 761.10(d)(l) was contained in Subpart
B, entitled Disposal of PCBs and PCB Items, rather than in a Subpart A
definitions section. "Obviously no one should have to follow such a
circuitous route simply to find out whether penalties attach." Judicial
Officer McCallum further pointed to the storage regulations in Subpart E,
Annex III, which address "leaks" comprehensively. According to his Final
Decision, the storage regulations proscribe improper storage of leaking
PCBs, but neither they nor the disposal regulations proscribe the leak
itself.
Judicial Officer McCallum set aside, in part, the initial AMTRAK decision
based on his appeal decision in Liberty Light. AMTRAK dealt with the "weeping"
of a small amount of fluid around a transformer terminal. In an opinion
-------
- 15 -
written prior to the Liberty Light Final Decision, Judge Harwood held
that failure to clean or contain a leak was a disposal violation, although
the leak itself was not. He based this decision on the risk that PCBs
could be washed off the transformer by rain into the surrounding environ-
ment. On appeal, Judicial Officer McCallum reversed this initial decision
based on Liberty Light. See also, Yaffee Iron and Metal Company, Inc.,.
TSCA No. V1-1C. (Decision by Administrative Law Judge Herbert L. Perlman,
March 27, 1981) (A sticky PCB mixture on the side of a drum was not a disposal
violation.
The leak at issue here was similar to the one described in Liberty Light.
The leak on the concrete slab of Substation 2300 was from the draincock of the
transformer. Tr. at 175. According to Messrs. Bench and Hanneman, the spot
was about 10 or 12 inches in diameter. Tr. at 108, 172-73. Mr. Allen
testified that the spot was three inches by two and one-half inches. Tr. at
464. The spot was entirely on the eight foot square concrete pad. Tr. at
173, 174, 212. As with Liberty Light, EPA presented no evidence to show
any flow or that the oily substance had run off the concrete slab. See
Tr. at 144. Mr. Allen testified that the spot was dry. Tr. at 464. Both
Messrs. Hanneman and Allen testified that the spot was a fair distance
from the edge of the pad. Mr. Allen said that it was about four feet from
the edge, Tr. at 414, and Mr. Hanneman said that it was two to two and one-
half feet from the edge, Tr. at 212. EPA presented evidence that the
substation contained no containment curbing, Tr. at 112. Liberty Light
also dealt with a leak on concrete with no curbing.
-------
- 16 -
Complainant argues in rebuttal that neither Liberty Light nor AMTRAK are
on point. It asserts that in the Liberty Light case, the disposal issue arose
regarding approximately forty-two PCB capacitors that were being stored for
disposal, at least one of which was observed to be "leaking." In the AMTRAK
case, there was nothing on the record to indicate that the "leakage on one
transformer was anything more than the 'weeping1 or 'sweating1 of a small
amount of fluid around the transformer's terminals resulting from temperature
variations causing the terminal's seals to expand and contract."
Complainant states that the spill at Substation 2300 does not involve
leakage from capacitors (or even transformers) stored for disposal and does not
involve a weeping transformer. I agree. At Substation 2300, the EPA inspectors
observed a quantity of PCB oil below the draincock of an in-use and totally
intact PCB transformer. There is no assertion by Complainant that the material
weeped, seeped, or leaked from a seam in the transformer as was the case in both
Liberty Light and AMTRAK. Complainant asserts that what we are dealing with
is clearly spillage and thus improper disposal.
Respondent notes that Complainant refers to the leak under the
draincock of the Substation 2300 transformer as a "spill" and in so doing,
ignores its own administrative precedents which address the definition of
"spill" under the PCB rules. I agree. In re Liberty Light & Power, supra.
governs the issue of whether the leak at Substation 2300 was an illegal
disposal of PCBs. Judge Yost held that a leak of nonflowing highly
concentrated PCBs on a concrete pad located outside with no roof, walls,
-------
- 17 -
or containment curbing was not a spill or disposal of PCBs. The facts of
the Liberty Light case cannot be distinguished from the situation encountered
at Substation 2300. Judicial Officer McCallum also has rejected an
argument that the failure to clean up a leak is a disposal violation. In
the Matter of National Railroad Passenger Corp. (AMTRAK), supra. Complain-
ant, in the AMTRAK case, had based its unsuccessful argument on the
possibility that PCBs can be washed into the environment, the identical
argument raised here.
While the distinction between stored and in-use transformers is factually
present in these cases, it is my opinion that the distinction is a minor one.
The storage regulations proscribe improper storage of leaking PCB transformers
which have been removed from service, but neither they nor the disposal
regulations proscribe the leak itself. This is not to say that a leak
from an in-use transformer cannot or will not be construed as a spill or
improper disposal under any given set of facts. The amount of the leak,
the amount of contamination, and its impact on the environment will weigh
heavily in such a consideration. However, those factors are not present
here. For these reasons and those set out in the Initial and Final Liberty
Light decisions, Count X is dismissed.
-------
- 18 -
Red Drum - (Counts III and VII) Failure To
Mark and Improper Storage
Marking
Complainant alleges that Respondent failed to mark a red fifty-five
gallon drum located north of Respondent's water treatment pond and failed
to mark the area in which the drum was stored in violation of Section 15(1)
(c) of TSCA and 40 CFR 761.20(a)(l) and (10).
There is considerable proof on the record that the drums did contain
PCBs. Mr. Lynham, the MSHA inspector, testified that he was told by Mr.
Bayles, an employee of Respondent, "that the material (inside the drum)
was disposal of PCB contaminated oil from a compressor fire that occurred
on approximately February 11, 1980." (Lynham Tr., p. 56). Later, Mr.
Lynham testified that in subsequent conversations with Mr. Bayles and Mr.
Urban, also employees of Respondent, that he was told that the drum
contained "... materials used in the cleanup resulting from a fire in
the compressor house that occurred February 11 (1980), and PCB contaminated
materials were stored there." (Lynham Tr., p. 63). Mr. Bench, an EPA
inspector, testified that he was told that the red drum contained, ". .
.cleanup from the capacitor that burst in the compressor shedclean up
materials." (Bench Tr., p. 117). Mr. Hanneman testified that he was
told the contents of the drum contained soil and cleanup material from
the rupture of a. . .capacitor in the compressor room. (Hanneman Tr., p.
176). Mr. Hanneman also testified that "we determined that a capacitor
had ruptured in the compressor shed, and that a sample was taken of that
liquid, and in turn taken to a laboratory. The results of that sample
-------
- 19 -
was 26 percent PCB oil of which they began cleanup and the contents of
the drum were the results of that cleanup." (Hanneman Tr., p. 176). Mr.
Allen testified that, among other things, the red drum had a quantity of
material containing 26% PCBs (Allen Jr., p. 489). In its Answer, Respondent
states that "Mr. Allen stated that the drum contained materials used to
clean up a minute amount of PCBs that leaked from a capacitor when a
compressor exploded in a shed in February of 1980. Such materials included
rags, gloves, clothes, and a small amount of dirt cleaned up on the
concrete floor inside the shed." (Answer, p. 11). There is no dispute
that the drum did not have the prescribed PCB mark. Not only is that
fact established by EPA witnesses Respondent admits to it in its Answer
(Answer, p. 11). Further, the area in which the red drum was situated
was not posted with a PCB mark (Hanneman Tr., p. 178).
Respondent asserts that to prove a marking violation, EPA must prove
that the red drum was a "PCB container." A PCB container is a drum that
(1) contains PCBs and (2) whose surface(s) has been in direct contact
with PCBs. 40 CFR § 761.2(v). And that Complainant's brief argues only
.that the drum "did contain PCBs." Brief at 14. While Respondent admits
that the content of the red drum was material used in the cleanup in the
compressor shed, such as rags, soil, cleanup gear, etc. It argues that
Complainant ignores half of the definition of a "PCB container" that the
surface of the container has been in direct contact with PCBs, Respondent
asserts that the record lacks evidence that the surface of the red drum had
any direct contact with PCBs. Further, only part of the contents of the red
drum were PCB contaminated materials. The drum also contained materials
with no evidence of PCB contamination, such as a valve and small dry type
-------
- 20 -
transformers. Respondent's Brief at 41. The minute amount of PCBs that
leaked out of the capacitor indicates that only a small portion of any
solid materials inside the drum would have contained PCBs.
Mr. Allen testified that the red drum contained floor weepings from
inside the shed. Tr. at 446, 489. Several witnesses testified that "soil1
was contained in the red drum.
Respondent's defense that the red drum was not a PCB container must
be'rejected. While Complainant did not specifically allege or present
testimony that the surface of the container had been in direct contact
with PCBs, it would be unrealistic to assume that the rags, dirt or any
other contaminated materials in the red drum did not contain PCBs and that
they were not in direct contact with the surface of the red drum.
The red drum was marked "DANGER, TOXIC MATERIALS" with white spray
paint. The mark required by the PCB regulations 40 CFR 761.20(a)(l) is
illustrated in Figure 1 of Annex V:
(Boh/chlorinated Biphenyls)
A roxic environmentol contominont requiring
special handling and disposal in accordance with
U.S. Environmental Protection Agency Regulations
40 CFR 761For Disposal Information contaa
the rtoareg U.S. E.P.A. Office.
In case of accident ex spill, call roll free the U.S.
Coast Guard Notional Response Center:
600:424-SB02
Also Conioa
Tel. No.
Figure 1
-------
- 21 -
The spray painted words "DANGER, TOXIC MATERIAL" are not the equiva-
I
lent of a PCB label. Not only do the painted words fail to notify the
public-at-large, or Respondent's employees in particular, of what material
is in the drum, it does not provide the critical information found on a
PCB label. No emergency phone numbers are given. No emergency procedures
are set forth. In short, no information is given which would lead one to
believe that the toxic material in the drum is anything more than typical
mining waste. Additionally, the entire red drum was eventually placed in
an 85 gallon drum, which indicates Respondent considered it to be a PCB
container.
It is therefore concluded that the PCB container, red drum, was not
marked as required.
Storage
Regarding the storage of the red drum, Complainant alleges that the
evidence establishes that, not only was the drum not stored in an appropriate
storage facility, it was stored unsheltered in an open area. (Lynham
Tr., p. 65-66) (Bench Tr., p. 120-121) (Hanneman Tr., p. 178).
And further, considering the contents of the red drum, it is almost
impossible to believe that Respondent did not intend to dispose of the
drum and its contents. Therefore, I find that the drum and its contents
were being stored for disposal. As such, the area in which that drum was
located was a storage area used for storage of PCBs and PCB items for
disposal and required a PCB mark. It did not have one.
Respondent alleges that Complainant has failed to prove a violation of
"Section 761.20(10), requiring areas that "store PCBs and PCB items for disposal"
to be labeled. And that the record contains insufficient evidence that
-------
- 22 -
Respondent had made a conscious and deliberate decision to dispose of the
red drum at the time of the EPA inspection. And that Complainant must also
prove that Respondent intended to use the area around the red drum as a
PCB storage area.
As to the allegation that the storage of the red drum did not comply
with 40 CFR § 761.20(a)(l) and (10), Respondent argues that Complainant has
failed to prove the prerequisite to any violation that the red drum was being
stored for disposal. And further, that Respondent did take measures to protect
the contents of the red drum such as placing the sturdy and nonleaking drum
on a wooden pallet and tightly covering it with a lid.
It is my opinion that Respondent had made a conscious and deliberate
decision to dispose of the red drum and its contents. While no testimony
was illicited to this effect, my considered opinion is that Respondent had
no other choice than to dispose of the drum and its contents.
Even if Respondent had not intended to use the area around the red drum
as a storage area, the record is clear that the drum was stored there from
February 1980, until the arrival of the 85 gallon drums, a period far in
excess of thirty days, a requirement delineated in 40 CFR 761.42(c) which
reads as follows:
(c)(l) The following PCB Items may be stored temporarily
in an area that does not comply with the requirements of para-
graph (b) for up to thirty days from the date of their removal
from service, provided that a notation is attached to the PCB
Item or a PCB Container (containing the item) indicating the
date the item was removed from service.
As to whether or not the red drum was being stored for disposal as
stated above, I find it difficult or almost impossible that the red drum
and its contents were destined for any other action. I therefore conclude
-------
- 23 -
that the area was a disposal area, the area was not marked and that the
red drum and its contents were intended for disposal. These conclusions
constitute a violation of Section 15(1)(c) of TSCA and Sections 761.20(a)(l)
and (10) of the PCB regulations.
Count XI Disposal at Substation 4160
During EPA's September 17, 1980, inspection, the inspectors observed
residue directly below the draincock of the center transformer in Substation
4160 (Bench Tr., p. 112-113) (Hanneman Tr., p. 173). The residue, as was the
case at Substation 2300, was in an unsheltered area and susceptible to discharge
into the environment (Hanneman Tr., p. 173-174). EPA analysis of a split
sample taken of this residue showed there to be 160 parts per million PCBs
in the spilled material. Respondents analysis of its split revealed 90 parts
per million PCB (Comp. Ex. 5) (Resp. Ex. 16). Complainant alleges that this
residue of PCBs at Substation 4160 constitutes a spill and improper disposal
and is a violation of Section 761.10(a)(l) of the PCB regulations.
Respondent asserts that the evidence presented at the hearing indicates
that the leak at Substation 4160 did not constitute a "spill" as that term
was construed by Liberty Light. Substation 4160 was surrounded by a chain
link fence that remained locked. Tr. at 112, 145, 146. See Cotter Exhibit
39. Messrs. Bench and Hanneman testified that the center transformer of
the three transformers located at this substation caused the leak. Tr. at
112-13, 175. The leak covered three to four inches on the concrete pad
beneath the draincock. Tr. at 173, 174. According to Mr. Hanneman, the
concrete pad was approximately eight feet by fifteen, Tr. at 174, and the
spot was about two feet from the edge of the concrete pad. Tr. at 212-213.
It seems likely that the spot was farther from the edge of the concrete
-------
- 24 -
pad since the three inch spot was in the middle of an eight foot by fifteen
foot pad. It is concluded from the size of the spot of residue, the size of
the concrete pad and the location of the transformer on the pad establishes
that no PCBs found their way to the ground in such an amount and concentra-
tion as to eventually contaminate the environment.
The evidence indicates that the leak at Substation 4160 did not constitute
a spill and disposal as those terms were construed by Liberty Light and,
therefore, Count XI is dismissed.
Substation 800 (Counts VI and IX) Failure To Mark And
Improper Storage Of Two PCB Capacitors
At Substation 800, Respondent is alleged to have violated the marking
and storage requirements of the PCB regulations (Sections 761.20(a) and
761.10(b)(5)). Complainant alleges that the marking violations at
Substation 800 were for "one out-of-service transformer and two out-of-
service capacitors" and that the storage violation was for an out-of-use
transformer. However, evidence produced at hearing and cited by Complainant
in its Motion to Conform Pleadings to Proof filed in this matter on
August 12, 1983, limited the violations alleged at substation 800 to the
failure to mark and the improper storage of two PCB capacitors.
Complainant asserts that the EPA inspectors identified the two capacitors
in Substation 800 as "Custom Control 50 KVAR 460 volt Weaver Capacitors"
(Hanneman Tr., p. 191-192) (Comp. Ex. 7). That the two capacitors were not
in service and oil was seeping from one of the two capacitors at the seam
(Bench Tr., p. 115) (Hanneman Tr., p. 192). A wipe sample taken of the oil
seeping from the one capacitor confirmed that it contained PCBs (Comp. Ex. 5)
(Saunders Tr., p. 246). And further, that due to the general condition
-------
- 25 -
of these two capacitors, there can be no doubt that the capacitors could not
be reused and, thus, would require disposal (Bench Tr., p. 115) (Sittner Tr.»
p. 263). Neither capacitor was marked with a PCB mark (Bench Tr., p. 116)
and, assuming they would require disposal, the capacitors were stored improperly.
As a result, Respondent is alleged to have violated the PCB regulations
for the improper marking and storage of the two capacitors located in
Substation 800.
The only support to Complainant's argument that the capacitors were
subject to the PCB regulations, was established by analysis of a wipe
sample taken of oil emanating from a seam of one of the capacitors (Comp.
Ex. 5). Respondent attempted to establish that the capacitors contained
well over three pounds of PCBs by the expert testimony of Mr. Sittner, a
consultant in electrical engineering:
Q. The capacitors identified as the two Custom Control
KVAR 50, 460 Volt Weaver capacitor in Substation 800?
A. Only that they exceed three pounds very, very
greatly each.
JUDGE FINCH: You said greatly?
A. Many times. I can estimate probably in the order
of 30 to 40 pounds.
JUDGE FINCH: That is each capacitor?
A. Each one, sir, yes. (Sittner Tr., p. 279-280)
Respondent alleges that the subject capacitors were out-of-use, as
opposed to out-of-service. Mr. Bench testified that the subject capacitors
~were not "energized" and that in his opinion, the capacitors could not be
reused (Bench Tr., p. 115-116). That the expert testimony of Mr. Sittner
-------
- 26 -
was to the effect that when a capacitor "weeps or seeps or leaks. . .it
is generally disposed of. . . ." Complainant assumes then that the subject
capacitors had been removed from service, would require disposal, and should
have been marked. This required storage in an Annex III storage facility.
Substation 800 does not qualify as such.
Respondent rebuts Complainant's allegations by asserting that the
only evidence presented by Complainant regarding the type of dielectric fluid
in the capacitors was a sample result. This sample, taken by Mr. Hanneman,
indicated only that PCBs were present in one capacitor. EPA Exhibit 5, #3.
PCBs are regulated only at concentrations of 50 ppm or more, 40 CFR § 761.2(s).
Without a concentration level, the sample result does not indicate that the
capacitor was subject to the PCB regulations. The sample tested was
Araclor 1254 which is a dielectric fluid containing more than 50 ppm.
There is no evidence in the record that the other capacitor contained
PCBs. The inspection report, EPA Exhibit 7, specifically states that
"neither nameplates [on these capacitors] indicated the type of dielectric
fluid." Messrs. Bench and Hanneman also testified that the nameplates on
the capacitors did not indicate that they were PCB capacitors. Tr. at
151, 192.
Respondent further asserts that to establish a marking violation with
respect to the capacitors at Substation 800, EPA must prove that the capacitors
(1) contained 50 ppm or more of PCBs and (2) had been removed from use. 40 CFR
§ 761,20(a)(5). The record contains no evidence to prove the first element,
and contains insufficient evidence to prove the second element.
Of the elements above to be proven, (1) becomes irrelevant and immaterial
if it is determined that the two capacitors had not been removed from use.
-------
- 27 -
With respect to the element of removal, it is my opinion that EPA has
failed to establish a violation. According to In the Matter of Transformers
Unlimited Corp., PCB No. 79-003 (Decision by Administrative Law Judge 0. F.
Greene, March 20, 1981), EPA must prove that the equipment was permanently
out of service and that it was not intended for reuse. Respondent has
established that no decision had been made to take the capacitors permanently
out of service and the very location of the capacitors in the underground
substation indicates that no such decision had been made.
EPA attempts to prove removal from use by arguing that the capacitors
were not in service and that one capacitor had weeped, and by pointing to
"the general condition of these capacitors." The term "not in service"
means that the capacitors were disconnected, not that they were removed
from use. EPA Exhibit 7, the inspection report of Mr.Hanneman, states as
to these two capacitors, "Also two out-of-service capacitors were being
stored at this substation. . . ." There is no indication that Mr. Hanneman,
at this point, questioned anyone as to whether or not these capacitors
were "removed from use" or simply "out of service." There is a definite
distinction between the two; one requiring a label, the other not requiring
a label. I have been convinced by the evidence presented that the latter is
the case. Further, this evidence fails the Transformers Unlimited standard
for removal from use. Moreover, Complainant should not penalize a company
due to of an unknown circumstance that a capacitor starts to weep.
In-service or disconnected equipment can start to weep at any time. _Tf a
company knows that a capacitor has started to weep, it can be presumed to
"have made a decision to permanently remove the capacitor from service. EPA
should at least prove, however, that a responsible person knows of the leak.
-------
- 28 -
The evidence establishes that, at the time of the EPA inspection,
Respondent had made no decision to remove the capacitors from use permanently,
Mr. Allen testified that the capacitors were stored at this underground
substation "for possible reuse in the mine." Tr. at 454. He was the
person responsible for any decision to take the capacitors permanently
out of service. Tr. at 454. At the time of the inspection, Mr. Allen
"had not made any decision to remove them from permanent service." Tr.
at 455. Further, he would have made any decision to dispose of these
capacitors and no such decision had been made at the time of the EPA
inspection. Tr. at 455. The record contains no evidence that Mr. Allen
made any statements to the EPA inspectors during the inspection suggesting
that he had made any decision to remove the capacitors from use permanently.
SeeTr. at 151, 153, 224, 455.
In the M.atter of Briggs & Stratton Corp., TSCA Appeal No. 81-1
(February 4, 1981), held that the "mere removal of PCBs from service, in and
of itself, does not necessarily or automatically signify an intention to
dispose of them. . . ." That decision held that a company must make a
conscious and deliberate decision to dispose of PCB articles to trigger
Annex III requirements. In the Matter of Transformers Unlimited Corp.,
supra, held that the type of evidence needed to meet the Agency burden of
proof are statements made by a respondent indicating a decision to dispose
of equipment.
Complainant's evidence that attempts to prove that the capacitors were
being stored for disposal is precisely the type of evidence described in
Briggs & Stratton as inadequate. Complainant's argument that the capacitors
were being stored for disposal is based solely on the fact that they were
disconnected.
-------
- 29 -
No evidence was presented by Complainant that Mr. Allen, the person
responsible for PCB compliance, knew that one of the capacitors at substa-
tion 800 had started to weep prior to the EPA inspection. Without such
evidence, Complainant cannot establish a violation. Complainant's argument
that the "general condition" of the capacitors indicates removal from use
is rejected. While Mr. Bench's and Mr. Sittner's testimony tend to
support this allegation, Mr. Bench failed to substantiate his opinion,
see Tr. at 115-16, and Mr. Sittner stated that companies generally dispose
of capacitors that start to weep. Tr. at 263.
The evidence presented by Complainant fails to establish that the
capacitors were removed from use. The opinions of the EPA inspectors are not
substantiated and are of no probative value.
Counts VI and IX are hereby dismissed.
Area Behind Compressor Shed
The issue here is very controversial.
Complainant alleges that Respondent spilled and improperly disposed of
PCBs in the area immediately behind Respondent's compressor shed, thus
violating Section 761.10(a)(l) of the PCB regulations.
Complainant relies solely upon the fact that Mr. Hanneman and Mr. Bench,
both EPA inspectors, testified that during the inspection they were told that
PCBs which had been spilled inside the compressor shed during a fire on
February 11, 1980, had been hosed out the back of the shed (Hanneman Tr.,
p. 193) (Bench Tr., p. 128-129). Further, it was Mr. Hanneman's testimony
that, behind the compressor shed ". . .there was a depression in the ground,
probably two and one-half feet across, eighteen inches deep, oily, black
goo on most of the soil that was there and standing water." (Hanneman Tr.,
p. 193). Mr. Hanneman took a sample from that depression which revealed
-------
- 30 -
the presence of 19,000 parts per million PCBs (Comp. Ex. 5 and 7). The
validity of Mr. Hanneman's sample is undisputed.
It is also undisputed that there had been a fire in the compressor
shed which was caused by the explosion of a compressor. This fire caused a
capacitor to heat up and leak. The capacitor did not explode. As stated
above, Complainant alleges that the contamination behind the compressor
shed was a direct result of Respondent's efforts to hose the leaked PCBs
out to the back of the shed.
Respondent, however, asserts that the testimony of Messrs. Allen
and Vanlaningham, also an employee of Respondent, indicate that this cleanup
from the leaking capacitor could not have caused the presence of PCBs
behind the shed. They stated that on February 11, 1980, a compressor
located in the compressor shed did explode, which caused one capacitor to
heat up and leak. Tr. at 439. They further testified that the capacitor
leaked a small amount of liquid on the concrete floor beneath the capacitor.
The leak covered approximately two by three inches, and was three-sixteenths
to a quarter of an inch thick. Tr. at 440, 475, 537. Respondent's
employee took a sample of the content of the leak from the concrete to
determine its contents, and sent the sample to Industrial Laboratories.
At this point, it should be parenthetically noted that neither Mr. Allen
nor Mr. Vanlaningham were present at the compressor shed when the sampling
and cleaning was accomplished, but rather these procedures were allegedly
related to them by an employee of Respondent. Tr., p. 440. According to
Mr. Vanlaningham, the sample used for testing took up to 90 percent of the
-content of the leak. Tr. at 537-38. After receipt of the results of the
analysis indicating a PCB content, Cotter Exhibit 18, Respondent cleaned up
the rest of the liquid with trichlorethylene or acetone, which was absorbed
and placed in the red drum together with the absorbent material. Tr. at 441.
-------
- 31 -
Respondent repeated this process at least twice. Tr. at 441. After this
chemical cleaning process was completed, Respondent steam cleaned the
inside of the shed. Tr. at 445, 538. Messrs. Allen and Vanlaningham
testified that steam cleaning, which occurred after chemical clean up of
the leak, could not have caused the presence of PCBs behind the compressor
shed. Tr. at 476, 537.
Respondent further asserts that until the issuance of the EPA Complaint
on April 22, 1981, Messrs. Allen and Vanlaningham were not aware of the
presence of PCBs behind the compressor shed, Tr. at 435, 477, 527, 542.
And, therefore, had not attempted to clean up behind the compressor shed
prior to the EPA inspection. Tr. at 527, 528.
In furtherance of Respondent's defense, it is asserted that while
Complainant has failed to establish that Respondent caused the contamination
behind the compressor shed, Respondent also presented evidence as to what
might have caused the contamination. Mr. Vanlaningham testified that a
Rural Electric Assocation ("REA") substation, not owned or controlled by
Respondent, was located in the area of the compressor shed until about
1972. Tr. at 538. See Cotter Exhibit 41, a picture of the Cotter site
at the time the REA substation was located there.
Complainant does not dispute the fact that a Substation once occupied
the same general location as where the PCB spill was observed by the EPA
inspectors, but correctly observes that Respondent presented no evidence
whatsoever that PCBs were spilled by Rural Electric Association from that
y
substation in that specific area.
2J While there was some indication that Complainant might present rebuttal
to this contention by Respondent, and the record was held open for that
purpose, the record was later closed upon motion by Complainant.
-------
- 32 -
While the stated positions of each party are plausible, the best
evidence is on the side of Complainant.
First, Carl Urban, an employee of Respondent, told Mr. Lynham, an
inspector of the Mine Safety and Health Administration, who inspected
Respondent's premises in July 1980, prior to Complainant's involvement,
as follows:
A. . . .the fire that had occurred on February 11, and
that he [Carl Urban] had washed out the oil and cleaned up
and put the material used to clean up the mess in the red
barrel out by the white trailer that had toxic materials.
Second, the inspection report of Mr. Hanneman which sets forth the
initial account of Complainant's first inspection of the shed site states:
"SPILL SITE (Located behind compressor shed, south of the main office building)
Mr. Sluga showed us the site of the burst PCB capacitor in the compressor
building. He said the liquid from the spill was hosed off the concrete floor
into the rear of the compressor building and out onto the ground behind the
building. I took a soil sample (PH 800917-4) from grease- and oil-soaked
residue in a shallow depression in the ground, outside and at the rear of the
compressor building."
Mr. Sluga, in spite of his position with Respondent, was the person who
directed and accompanied Mr. Hanneman to the compressor shed on this initial
visit by Complainant, and was the second employee who advised that the leak
was "hosed off."
It was this statement concerning the "hose off" that prompted Mr. Hanne-
man to inspect behind the compressor shed.
Mr. Allen, who testified most emphatically that the hosing out of the
leaked PCBs did not occur, was not present during the clean up procedures.
Therefore, his testimony is given little weight.
The court is convinced that the testimonies of Mr. Lynham and
Mr. Hanneman are the more accurate accounts of what occurred immediately
after the fire and leak. This is not to say that additional measures,
-------
- 33 -
such as those related by Mr. Allen, did not take place at a later time,
but only after the original "hose off."
It is concluded, therefore, that the action taken to "hose off" the
"leak" constituted a spill and improper disposal of PCBs in violation of
Section 761.10(a)(l) of the PCB regulations.
Bone Yard - Counts V, VIII and XIII
Generally:
Complainant alleges that Respondent violated the marking, storage,
and disposal requirements of TSCA and the PCB regulations in the Bone
Yard (Section 15(1)(C) of TSCA and Sections 761.20(a) or (c), 761.10(b)
(5) and (c)(3), and 761.10(a)(l)).
Complainant asserts that on the whole, it is important to under-
stand that the Bone Yard should be viewed as nothing more than a highly
disorganized area containing junk, old vehicles, and other discarded
items. Mr. Hanneman referred to the Bone Yard as a "junk yard" (Hanne-
man Tr., p. 184).
It is appropriate at this point to quote from EPA Ex. 7, the EPA
Inspection Report regarding the official description of the Bone Yard by
the inspectors.
"BONE YARD (Located at the north end of the complex)
Mr. Allen and Mr. Sluga took us to the "bone yard" at the north end
of the Schwartzwalder complex. The bone yard is an area about 100 yards
long and 50 yards wide which appears to be a scrap yard where used equip-
ment, empty barrels and junk cars and trucks are stored. At the north end
of this bone yard, Mr. Allen showed us the site where the unused and un-
servicable capacitors were stored for disposal. . We found approximately 15
"PCB capacitors at this site, as follows:
Five Large GE Pyranol Capacitors: None appeared to be leaking; none
had PCB marks.(Example: SN V91116 GE Pyranol 0.334 gallon see photos
#11 and #12; photo #11 is nameplate of SN V91116, at right knee of
inspector in photo #12). Because the remaining four capacitors were
-------
- 34 -
scattered on the ground in the area around the panel box in photo #12,
and they were in a possibly contaminated area, we did not get their
serial numbers. They all appeared to be the same size as the example.
Two Large GE Pyranol Capacitors; GE SN .7920091 A080A, on the ground;
no PCB marks. Because of the position of the other capacitor, we were
unable to get its serial number (see in front of panel box, next to barrel,
in photo #12).
Six Large PCB Capacitors: Mr. Allen estimated that approximately six
PCB capacitors were stored in a 55-gallon drum in the bone yard (see
photo #12), one of which was the burst capacitor from the compressor
building. Because of obvious leaking of PCB liquid and possible contam-
ination, we did not count the exact number of capacitors in the barrel,
nor were we able to determine the size of the capacitors in the barrel.
The drum had no PCB mark, no lid, and none of the capacitors we could see
had PCB marks.
Two GE Capacitors: SN B37332 and SN B31968, each containing 1.9
gallons of pyranol. D~ne capacitor had a PCB mark; both had manufacturer's
nameplates (see photo #14). The capacitors were sitting inside a metal
electrical panel box (gray box in front of inspector, photo #13). One
of the capacitors was leaking onto the bottom of the panel box. The wood
on the outside base of the box was also oil-soaked. We were unable to
determine whether or not the ground was oil-soaked."
See EPA Exs. 12-C, 12-D, 12-G and page 6 of EPA Ex. 8.
Black Drum Containing Six PCB Capacitors
It was the testimony of three different EPA witnesses, Mr. Lynham,
Mr. Bench, and Mr. Hanneman, that they were told by officials of Respondent
that the uncovered black 55-gallon drum contained six PCB capacitors,
including the one which had burst in the compressor shed on February 11,
1980, a sample from which was found to contain 260,000 parts per million
PCBs. Mr. Lynham testified that he was told, during conversations with
Mr. Allen and Mr. Bayles that the black drum in the Bone Yard contained
six Pyranol (a trade name for dielectric fluid containing PCBs) capacitors.
Mr. Lynham also testified that he read the manufacturer's nametag on the
capacitors and determined that they contained pyranol. Lynham Tr., p. 67.
-------
- 35 -
Complainant alleges that there can be little dispute that the
capacitors in the black drum were out of service, leaking, and thus
designated for disposal. Mr. Lynham testified that the uppermost PCB
capacitor in the drum was punctured and leaking oil (Lynham Tr., pp. 66-
67, 69, and 84). Mr. Bench also observed the capacitors in the drum
leaking oil (Bench Tr., p. 123). Even Mr. Allen testified that he placed
capacitors in the drum because they were leaking (Allen Tr., p. 518).
While examining EPA Exhibit 12-G, Mr. Sittner further elaborated on the
upper-capacitor in the drum and discussed the general condition of that
capacitor:
I would estimate right in the center of that lower compart-
ment approximately three inches, and probably six inches
above the ring of the 55 gallon drum appears to be two
indentations. The upper one looks almost like a hole. The
one three inches above may be just an indentation, and then
on the left hand corner of the device, looks like a penetra-
tion of the lower section of the capacitor. Even if those
are not holes through those, it would degrade and make the
reuse of that device very doubtful, because it would be too
close to the internal electrical foils and so on that are
inside that capacitor. It would cut down the electrical
clearance. (Sittner Tr., p. 265).
And further, Complainant asserts that the capacitors in the black drum
were neither marked nor stored properly. There were no PCB marks on the
drum (Hanneman Tr., p. 182) (Lynham Tr., p. 70); the drums were not stored
in an appropriate storage facility, and the lid was off the drum at the
time of both the MSHA inspection and the EPA inspection (Lynham Tr., p. 69)
(Hanneman Tr., p. 189) (Comp. Ex. 8, p. 6) (Comp. Ex. 12-G).
As in the instance of the red' drum, Respondent alleges that the black
drum is not a PCB container.
-------
- 36 -
To prove that a drum is a "PCB Container," Complainant must prove that
any PCBs contained in the barrel have touched the surfaces of the barrel.
Respondent correctly asserts that the record contains no evidence
that any PCBs in any capacitor in the black barrel had touched the
surface of the black barrel.
None of the inspectors testified that they observed any fluid identi-
fied as PCBs from any capacitor touching the -sides of the barrel. Mr. Lynham,
testified that he saw only one Pyranol nameplate on those capacitors in
the black barrel. That his testimony does not establish that the capacitor
with the Pyranol nameplate was the same one that, he claimed, had leaked
oil. See Tr. at 67-68. Further, Mr. Lynham never testified that any oil
he claimed to have observed had touched the sides of the black barrel.
Respondent further asserts that Messrs. Lynham, Bench and Hanneman
testified that they could not see inside the barrel to determine whether
any liquid had touched the sides of the barrel. Tr. at 69, 87, 158, 221.
They observed no leaking on the outside of the black barrel and did not
turn it over to look at the bottom of it. Tr. at 76, 86-87, 158 and
221-22.
Complainant replies that the existence of particular specifications
in Annex III of the PCB regulations for PCB containers used to store
nonliquid PCBs clearly refute that contention (see Section 761.42(c)(6)).
The distinction between PCB Containers and PCB Article Containers
does not revolve around the presence or absence of PCB liquids, but
rather around the manner in which the PCBs in that container are enclosed.
The definition of PCB Article Containers is restricted to containers
-------
- 37 -
holding PCB Articles and PCB Equipment which have maintained their structural
integrity; i.e., have not allowed the inside surface of the container to
become contaminated.
In the case of the black drum located in the Bone Yard, there is no
doubt that it fits the definition of "PCB Article Container" and as such was
subject to the marking requirements.
Mr. Allen did testify that a leaking PCB capacitor was placed in the
black drum.
Q. One was placed in there because it was leaking and
you wanted to contain it?
A. That is correct. (Allen Tr., p. 518)
There were exposed PCBs within the black barrel resulting from a leak-
ing PCB capacitor. As discussed above, by definition, a drum holding PCBs
is a PCB Container. A drum containing a leaking PCB article is by defini-
tion a PCB Container. It is concluded, therefore, that the black drum
is a PCB container which required a PCB mark.
Respondent does not dispute the fact that the black barrel was not
marked. It is concluded that there was a violation of 761.20(a) on the
basis of the black drum in the Bone Yard.
Individual Capacitors In Black Drum
Complainant alleges a violation of Section 761.20 (a)(3) and (c)(2),
relating to high voltage capacitors. High voltage capacitors are ones
that operate at 2,000 volts or above 40 C.F.R. § 761.2(d)(2). Mr. Allen
testified that all of the capacitors in the black barrel were 480 volts.
-------
- 38 -
Tr. at 450-51. EPA submitted no evidence to contradict his testimony
except that Mr. Sittner, a private consulting engineer, testified that in
his opinion the capacitor sticking out of the top of the black barrel
contained more than three pounds of dielectric fluid.
This statement by Mr. Sittner does not confirm or rebut that the
capacitor is a large, high voltage capacitor as defined in Section 761.2
(a)(2). Complainant has not carried its burden of proof on this violation
of failure to mark the large high voltage capacitor and same is hereby
dismissed upon the finding that the capacitor is a large low voltage
capacitor.
However, this large low voltage capacitor should have been marked
if it had been removed from use and was being stored for disposal.
While there is considerable discussion by both Complainant and
Respondent concerning the marking of other capacitors in the Bone Yard,
i.e., two large G. E. Pyranol capacitors on the ground, five more large
G. E. capacitors lying on the ground, and two capacitors in a discarded
panel box, the evidence weighs in favor of Complainant that these were
all PCB capacitors, which had been removed from use, not properly marked,
and were improperly stored for disposal. Complainant's reasoning is as
follows:
Two Large G. E. Pyranol Capacitors
It was the testimony of Mr. Hanneman that there were two
capacitors on the ground in a second area of the Bone Yard (Hanneman Jr.,
.p. 187). Mr. Hanneman was able to identify the manufacturer's nametag
on one of the two capacitors (Serial number 7930091 A080A) and noted that
-------
- 39 -
it was a General Electric Pyranol capacitor (Hanneman Jr., p. 187) '(Comp.
Ex. 7). Based on his expertise in the electrical field, when shown
Complainant's Exhibit 8, page 6 (photo #12), Mr. Sittner testified that
both .of the subject transformers contained more than three pounds of PCBs
(Sittner Tr., p. 280). Again, neither capacitor bore a PCB label (Bench
Tr., p. 122-123) (Hanneman Tr., p. 182). It is clear that Respondent
violated the marking and storage requirements of the PCB regulations by
not placing a PCB mark on these capacitors when they were removed from
use and by not placing them in an appropriate storage area.
Five Large G. E. Pyranol Capacitors
During the EPA inspection, Mr. Hanneman noticed one group of
five capacitors lying on the ground in the Bone Yard. Mr. Hanneman
observed that the five capacitors were of the same size and that one
of the five serial number V91116 bore a manufacturer's nametag
which identified it a "A 6E Pyranol capacitor containing .334 gallons
of Pyranol." (Comp. Ex. 7) (Hanneman Jr., p. 185). Mr. Hanneman further
observed that the capacitors in this group were "dirty and neglected."
It was the testimony of Mr. Sittner that capacitor V91116 contained
3.82 pounds of PCBs. The capacitors in this group, then, were required
by Section 761.20 to be marked with a PCB mark at the time of removal
from use and stored in a proper storage facility. None of these capa-
citors were marked (Bench Tr., p. 122-123) (Hanneman Tr., p. 132), nor
were they stored in a storage facility meeting the requirements of
Section 761.42.
-------
- 40 -
GE Capacitors
During the September 17, 1980, inspection, the EPA inspectors
observed two more capacitors sitting haphazardously in the bottom of a
discarded electrical panel box. The two capacitors bore manufacturer's
nametags indicating that each contained 1.9 gallons of Pyranol (Comp. Ex. 7)
(Comp. Ex. 8, p. 7) (Hanneman Tr., p. 190). These two capacitors were
stored for disposal. They were leaking, stored improperly, and one was
unmarked.
Both Mr. Bench and Mr. Hanneman observed oil in the bottom of the
panel box which had spilled from the capacitors stored in the panel box
(Bench Tr., p. 123) (Hanneman Tr., p. 186). Moreover, Mr. Allen testified
that he was aware that one of the capacitors in the electrical panel box
was leaking Pyranol (Allen Tr., p. 514). Considering the fact that the
panel box was not enclosed and, in fact, was open to the elements, there
was a definite potential for escape of PCBs into the environment.
Mr. Hanneman testified that one of the two capacitors in the elec-
trical panel box did have a PCB mark. However, it was Mr. Hanneman's
further testimony that neither the second capacitor nor the area in which
they were stored was marked (Hanneman Tr., p. 182-183).
The marking violations in the Bone Yard are further established
by Respondent's failure to mark the panel box in which two out-of-service
PCB capacitors were observed. The panel box falls within the definition
of "PCB Container." Two EPA inspectors observed a Pyranol capacitor
-leaking onto the bottom of the box (Bench Tr., p. 123) (Hanneman Tr.,
p. 186). Respondent argues that the PCB label on one of the two capacitors
-------
- 41 -
constitutes labeling of the PCB container itself. This argument is rejected
for obvious reasons, i. e., the labeling of a capacitor in a PCB container
does not constitute labeling of the PCB container.
The facts established in this case indicate that the subject capa-
citors were removed from use and, in most instances, could, not have been
reused even if so desired by Respondent. The capacitors located in the
Bone Yard were not neatly stacked, sorted, and categorized. They were
deposited randomly in four general areas (Hanneman Tr., p. 17). Some were
thrown leaking into a black barrel. Some were thrown leaking into an
electrical panel. Some were just laid on the ground. At least three
were identified as damaged and, thus, as verified by the expert testimony
of Mr. Sittner (Sittner Tr., p. 265), incapable of being reused.
Complainant has shown that some, if not all, of the capacitors in
the Bone Yard were PCB capacitors, removed from use and not marked and
were improperly stored for disposal and such a finding is hereby made.
Records Count XIV
Complainant alleges that Respondent violated the provisions of Sec-
tion 761.45(a) in that the records required were not being kept.
At the commencement of the inspection, Mr. Bench "asked to inspect
the official PCB records." Mr. Allen said there were "no PCB records."
EPA Ex. 7. Mr. Bench testified that he inquired of Mr. Boyles, Mr. Allen's
superior, about the records at the end of the inspection as well and
received the same response. Tr. 105 and 129-30. Mr. Hanneman testified
to this same effect. Tr. 171-172.
Respondent asserts that "While Mr. Allen told the EPA inspector
during the inspection that he had no PCB records, Tr. 105, he thought the
-------
- 42 -
inspectors wanted records on official forms. Tr. 483. And that since
an annual report was required to have been filed for the year 1979 at
the time of the EPA inspection, Mr. Allen was preparing records and, in
fact, had handwritten PCB records on a yellow notepad that was sitting
on one of the barrels in the tin shed at the time of the inspection.
Respondent introduced into evidence Cotter Ex. 19 which purports to
indicate some of the information (records) contained on the yellow notepad
previously mentioned. It also sets forth additional record information.
Mr. Allen stated that a part of the first two pages of Cotter Ex. 19 was
the information contained on the yellow notepad. However, Mr. Allen
testified that "They were made in my own handwriting, but I am not sure
if it was prior to the inspection or not." Tr. 482.
It must be concluded that Respondent had not developed and maintained
records on the disposition of PCBs and PCB items as required by Section
761.45(a).
Appropriateness of the Proposed Penalty
Section 16(a)(2)(B) of the act (15 U.S.C. 2615(a)(2)(B) provides that
in determining the amount of a civil penalty "the Administrator shall take
into account the nature, circumstances, extent, and gravity of the. . .
violations and, with respect to the violator, ability to pay, effect on
ability to continue to do business, any history of prior such violations,
the degree of culpability, and such other matters as justice may require."
Section 22.27(b) of the Rules of Practice (45 F.R. 24360), the rules of
practice applicable herein, provides as follows:
(b) Amount of civil penalty. The presiding officer shall
determine the dollar amount of the recommended civil penalty
to be assessed in the initial decision in accordance with any
criteria set forth in the act relating to the proper amount
-------
- 44 -
Good Faith
It does appear that an effort was made by Respondent during the month
between the time Mr. Lynham of MSHA made his inspection and the date of
the EPA inspection. The 0 and A Document was received prior to the EPA
inspection. Pursuant to information contained therein, Mr. Allen ordered
PCB labels, DOT_approved 55 gallon drums and 85 gallon barrels. He had
placed certain capacitors in PCB labelled drums, which had arrived in
August 1980, and placed the drums in the tin shed. By the time of the
EPA inspection, Mr. Allen had started labelling other equipment, even
though some of the labelling might not have been in accordance with the
PCB regulations.
Complainant adjusted the proposed penalty upwards by 15% because of
the violator's attitude concerning the PCB rules. In evaluating the attitude
of an alleged violator, the Civil Penalty Policy requires that the prompt-
ness of corrective actions be taken into account in proposing a penalty.
Mr. Blackwell, the EPA employee who calculated the proposed penalty,
admitted that he disregarded this factor by not attempting to discover
the corrective actions taken. The record is silent as to any objective
evidence such as statements or actions in support of any alleged "bad
attitude" on the part of Respondent. For the reasons set forth, the overall
proposed penalty for each count found to be in violation totalling $69,000.00
is hereby reduced by 15% to a penalty of $58,650.00.
Since $37,950.00 has been eliminated from the proposed penalty based
upon a finding of no violation or, in the case of Counts II and IV, by
stipulation of the parties and an additional 15% or $10,350.00 has been
-------
- 43 -
of a civil penalty, and must consider any civil penalty guide-
lines published under the act. The presiding officer may
increase or decrease the assessed penalty from the amount
proposed to be assessed in the complaint.
The penalties proposed herein and the resultant findings are as
follows:
Violation
Substation 2300 Found Dismissed
Count I Marking $11,500.00
Count X Disposal $ 5,750.00
Red drum
Count III Marking 1,725.00
Count VII -- Storage 1,725.00
Substation 800
Count VI Marking 1,725.00
Count IX Storage 1,725.00
Substation 4160
Count II Marking 11,500.00*
Count XI -- Disposal 5,750.00
Bone Yard
Count V Marking 1,725.00
Count VIII -- Storage 1,725.00
Count XII Disposal 19,550.00
Area Behind Compressor Shed
Count XIII Disposal19,550.00
Line Material Company Transformers
Count IV Marking 11,500.00*
Recordkeeping
Count XIV 11,500.00
$69,000.00 $37,950.00
Respondent has suggested that its general good faith efforts to comply
and its credit for expenditures for PCB compliance should mitigate any penalty
which might be assessed for violations found to exist. In addition, Respondent
contends the actual calculation of the penalty by Complainant is in error since
the Guidelines (45 F.R. 59770) were not followed.
* Dismissed by stipulation.
-------
- 45 -
eliminated by readjusting the penalty pursuant to the "bad attitude"
allegation, I find that the total'penalty proposed, $106,950.00 should
be reduced to $58,650.00
All contentions of the parties presented for the record have been
considered and whether or not specifically mentioned herein, any suggestions,
requests, etc., inconsistent with this Initial Decision are denied.
ORDER*
Pursuant to Section 16(a) of the Toxic Substances Control Act (15 U.S.C.
2615(a)), a civil penalty of $58,650.00 is hereby assessed against the
Respondent Cotter Corporation, Schwartzwalder Uranium Mine for the violations
of the act found herein.
Payment of the full amount of the civil penalty assessed shall be made
within sixty (60) days of the service of the final order upon Respondent by
forwarding to the Regional Hearing Clerk a cashier's check or certified
check payable to the United States of America.
EdWafd B; Finch
Chief Administrative Law Judge
Datedr
* Unless an appeal is taken pursuant to Section 22.30 of the rules of
practice or the Administrator elects to review this decision on his
own motion, the Initial Decision shall become the final order of the
Administrator. (See Section 22.27(c)).
-------
CERTIFICATION
"
I hereby certify that a copy of this Initial Decision was mailed to \
*.
the Regional Hearing Clerk, U. S. EPA, Region IX, by certified mail, return
receipt requested, and the original of this Initial Decision was hand-carried
to the Hearing Clerk, EPA Headquarters, this date.
_x>^_^ ^4
' Leann* B. Brfisvert
Secretary to CALJ Edward B. Finch
March 21, 1984
-------
3D
-------
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of: )
)
Robert Ross & Sons, Inc. ) TSCA Appeal No. 82-4
Respondent )
TSCA Docket No. V-C-008 )
FINAL DECISION
Complainant, Director of the Enforcement Division, EPA,
Region V, appeals from an Initial Decision of Administrative Law
Judge Spencer T. Nissen dismissing charges brought against Respond-
ent, Robert Ross & Sons, Inc., under the authority of §16(a) of the
Toxic Substances Control Act (TSCA), 15 U.S.C. §2615(a). Respond-
ent, although agreeing with the result reached in the Initial Deci-
sion, filed a protective appeal, contending that certain findings
of fact and conclusions^of law in the Initial Decision are in error.
Complainant instituted this proceeding by a complaint issued
on March 31, 1980, alleging violations of regulations issued under
I/
§6(e) of TSCA. The regulations in question govern the disposal,
I/ TSCA §16(a)(l) provides as follows:
Civil. (1) Any person who violates a provision
of Section 15 shall be liable to the United States
for a civil penalty in an amount not to exceed
$25,000.00 for each such violation. Each day such
a violation continues shall, for purposes of this
subsection, constitute a separate violation of
Section 15.
TSCA §15 provides, in pertinent part, that it shall be unlawful
for any person to "(1) fail or refuse to comply with . . . (B) any
requirement prescribed by § . . . 6, or (C) any rule promulgated
under § ... 6."
-------
storage and marking of polychlorinated biphenyls (PCBs), 40 CFR
2/ » .
Part 761 (1978). These regulations partially implement §6(e)
of TSCA which, among other things, directs the Administrator to
prescribe methods for the disposal of existing PCBs. Complainant
alleged in the complaint that Respondent improperly disposed of
I/
PCBs by burning them in an unapproved incinerator. Respondent
was charged with the violations as a result of two separate in-
spections of its facilities, one on July 10, 1979, and the other
2/ "PCBs" are defined in the regulations at 40 CFR §761.2(s) as "any
chemical substance that is limited to the biphenyl molecule that has.
been chlorinated to varying degrees or any combination of substances
which contain such substance." Section 761.l(b) provides that "the
terms PCB and PCBs are used in this rule to refer to any chemical sub-
stances and combinations of substances that contain 50 ppm (on a dry
weight basis) or greater of PCBs, as defined in §761.2(s). . . . Any
chemical substances and combinations of substances which contain less
than 50 ppm PCBs because of any dilution, shall be- included as PCB
and PCBs [over 50 ppm PCBs] unless otherwise specifically provided."
_3_/ The complaint actually reads in pertinent part:
1. The above referenced facility of Robert Ross
and Sons, Inc., operates an incinerator intended
to destroy and dispose of liquid wastes.
4. 40 CFR §761,10(a)(3) requires liquids including
but not limited to mineral oil dielectric fluid,
containing a PCB concentration of greater than
500 ppm be disposed of in compliance with Annex I,
§761.40.
5. At the time of an inspection initiated by U.S. EPA,
Region V, of the above named facility on July 10, 1979,
PCB laden waste oils were found in concentrations of
4400 ppm and 760 ppm .... (next page)
-------
on November 5, 1979. A civil penalty of $35,750 was proposed
I/ ,
in the complaint.
A hearing was held in Chicago, Illinois on September 22-24,
1981. In his Initial Decision, the presiding officer dismissed
the alleged disposal violation arising out of the November inspec-
3/ continued
6. At the time of an inspection initiated by U.S.
EPA, Region V, of the above named facility on or
about October 2, 1979, it was found that the above
referenced PCS laden waste oils with a concentration
of greater than 500 ppm had been incinerated in vio-
lation of Annex I, 40 CFR §761.40. (Emphasis added.)
Waste oils are specifically defined in the PCB regulations as "used
products primarily derived from petroleum, which include, but are not
limited to, fuel oils, motor oils, gear oils, cutting oils, transmis-
sion fluids, hydraulic fluids, and dielectric fluids." 40 CFR §761.2
(ii). Respondent argues that the complaint should be dismissed
because Complainant has not proven by a preponderance of the evidence
that the wastes in issue were waste oils as defined in the regulations.
However, the gravamen of the violation is that Respondent disposed of
PCBs in concentrations over 50 ppm in an unapproved manner. Therefore,
whether the Respondent allegedly disposed of PCBs as waste oils, liqui.d
wastes, or fuel (as the wastes are-variously referred to throughout the
transcript) is not material. In addition, if any error did occur
because the wastes were characterized as waste oils, it was harmless
because the true nature of the wastes was actually litigated. Re-
spondent alleges no undue surprise based on any variance from the
pleadings. Nor does Respondent proffer any additional evidence or
contend that its presentation would have differed had the complaint
referred to PCB laden wastes rather than PCB laden waste oils. It is
a generally accepted principle of law that the purpose of an admini-
strative complaint is to give adequate notice of the alleged charge
so that the charged party can prepare a defense. See Davis, Admini-
strative Law TreatiseT §8.04 (1958) and the rules governing this
proceeding, 40 CFR §22.14. The complaint sufficed to provide such
notice in this case.
4/ Two disposal violations were alleged in the complaint. A penalty
of $18,750 was proposed based on samples taken on July 10, 1979, from
an 80,000 gallon tank and a 17,000 gallon tank; a penalty of $17,000
was proposed based on samples taken from a mixing pit on November 5,
1979.
-------
tion, because incineration had not been proved as alleged by
Complainant. He made no other findings regarding that alleged
violation. He also dismissed the charge based on the July in-
spection because the samples were not representative of the
materials in the containers from which they were taken.
On appeal, Complainant only contests the dismissal of the
charge based on a sample (referred to as sample "SO}"), taken
during the July inspection, which allegedly contained 4,400 ppm
5/
PCBs. In response, Respondent argues that, in addition to
not being a representative sample, sample SOj was not analyzed
appropriately and the calculations from which the PCB concen-
tration was derived were flawed; therefore, according to
Respondent, the presiding officer's conclusion that sample SO}
contained PCBs in concentrations of 4,400 ppm as alleged by
Complainant was erroneous. For the reasons stated below, the
presiding officer's Initial Decision dismissing the charges
against Respondent is affirmed.
5/ Although Complainant took two samples (referred to as "SO}" and
"SOg," respectively) from Respondent's 80,000 gallon storage tank
on July 10, Respondent was not charged with a violation of the
disposal regulations based on the second sample (SOs). See n. 9,
infra. Complainant also based the alleged violation on a sample
taken from the 17,000 gallon tank (803) which had a PCB concentra-
tion of 760 ppm. See n. 3, supra, count 1, 115. However, the
presiding officer found that Complainant had not proven that the
waste in the 17,000 gallon tank had been incinerated. Initial
Decision, conclusion 2. Complainant does not appeal dismissal of
this aspect of the alleged disposal violation.
-------
BACKGROUND
Respondent operates a waste disposal facility where indus-
trial waste is incinerated. The waste typically includes adhe-
sives, pigments, solvents, resins, printing inks and plasticizers.
When the waste arrives at Respondent's facility, it is added to
a mixing pit, which may or may not contain waste from previous
deliveries; the waste in the mixing pit is then mixed; and after-
wards, it is transferred to an 80,000 gallon tank where it is
mixed again and eventually transferred to a 50,000 gallon tank.
From there it is metered into an incinerator and used as fuel.
If the waste is too viscous to flow easily into the incinerator,
a thinning agent, stored in a 17,000 gallon tank, is added to the
mixture before it is metered into the incinerator and burned.
Respondent only accepts waste from the original generator of
the waste, who is required to submit a Waste Product Survey (Re-
spondent's Ex. 3) identifying the waste and-'its chemical com-
position. Respondent relies on the Survey to identify the con-
tents of the waste and does not perform any analyses of its own.
If the completed Waste Product Survey shows that the waste contains
PCBs, the customer must identify its concentration and provide
supporting documentation for that information. However, Respond-
ent's service agreements state that PCBs cannot be accepted for
i/
disposal.
6/ This apparent inconsistency, i.e., requesting information on
PCB concentrations in the Waste Product Survey, while stipulating
in-the service agreement that PCBs will not be accepted for dis-
posal, is nowhere explained in the record. See Tr. 417-418.
-------
On July 10, 1979, an EPA inspector took samples of waste
*
materials from Respondent's mixing pit, 50,000 gallon tank, 80,000
gallon tank, and 17,000 gallon tank. Only the sample (SO^) taken
I/
from the top of the 80,000 gallon tank is at issue here. The
inspector took the sample from the top of the 80,000 gallon tank,
which was 30 feet tall, by climbing a ladder and inserting an EPA
pole sampler into the nearly full tank. Because the material in
the tank was quite thick, the inspector was only able to insert the
pole to a depth of about four feet. He did not take any other
I/
samples from the "top" of the tank. Although the liquids in the
tank could have been mixed through use of a recirculation pump, no
mixing was done before the sample was taken.
After the inspection was completed, Complainant analyzed
sample SO}, using a gas chromatograph with electron- capture (GCEC);
the results allegedly showed that the sample contained PCBs in
concentrations of 4,400 ppm. Based on this evidence and the fact
that the contents of the tank were incinerated subsequent to the
inspection, Complainant charged Respondent with a violation of
the PCB disposal regulations prohibiting the burning of high
7_/ See nn. 4 and 5, supra.
8_/ Another sample (50%) was taken from the "bottom" of the tank.
This sample was taken from a five gallon bucket, which had been filled
from a valve in a pipe near the bottom of the tank. The liquid in the
bucket was drawn after the tank's recirculating pump was operated for
about ten (10) minutes. The analysis of this sample showed PCBs in
concentrations of 95 ppm. However, Complainant did not charge Re-
spondent with a violation of the regulations based on this sample.
See nn. 3 and 5, supra.
-------
I/
concentration PCBs in a non-complying incinerator. A penalty
JLO/
of $18,750 was proposed in the complaint.
DISCUSSION
The PCB regulations specify procedures for PCS disposal to
ensure that additional amounts of PCBs are not added to the en-
vironment. 40 CFR §761.10. In general, the regulations require
that all PCBs in concentrations over 50 ppm be disposed of in
an approved manner. Id. Materials with PCB concentrations be-
tween 50 and 500 ppm may be disposed of in an EPA approved chem-
ical waste landfill, in an EPA approved incinerator, or in an
EPA approved high efficiency boiler. 40 CFR §761.10(a)(2)(3)(4)
and (5). However, materials containing PCBs in concentrations
greater than 500 ppm may only be disposed of in an EPA approved
incinerator. 40 CFR §761.10(a)(1). .Materials containing PCBs in
concentrations below 50 ppm, with one exception, do not have to
be disposed of in compliance with the foregoing procedures. The
exception applies to materials that contain less than 50 ppm PCBs
ii/
because of dilution. In the instant case, it is undisputed
£/ Complainant charged Respondent in the complaint with burning
PCBs in concentrations of 500 ppm or greater; however, as the dis-
cussion in the text demonstrates, the relevant cutoff is actually
50 ppm. Therefore, Complainant need only prove that PCBs in con-
centrations of at least 50 ppm were disposed of improperly.
1Q/ The proposed penalty was based on samples SO^ and 503.
See nn. 4 and 5, supra.
ll/ See n. 2, supra, which explains that chemical substances and
combinations of chemical substances containing less than 50 ppm
PCBs as a result of dilution are still considered to be PCBs for
purposes of the regulations.
-------
8
that Respondent's incinerator is unapproved. The only ques-
tion is whether the incinerated waste contained PCBs in con.-
centrations requiring disposal in an approved incinerator.
The answer- to this question depends on whether sample SOj has .
probative value because it is a "grab sample," not a represen-
tative sample; and whether Complainant's analysis of the sam-
ple's chemical composition was conducted in accordance with
acceptable protocols.
Sampling Procedures
In the Initial Decision, the presiding officer found that
sample S0j, the sample upon which this appeal is based, was not
representative of the contents of the tank from which it was
taken, and, because it was not representative, "Complainant had
not shown by a preponderance of the evidence that Respondent dis-
posed of PCBs ... in violation of 40 CFR §761.10(a) as charged.1
IV
Initial Decision, conclusions 1 and 6. This conclusion is
12/ Because the requirements in the PCS regulations vary according
to PCB concentration, and because, for the most part, the regula-
tions do not apply to PCBs in concentrations of less than 50 ppm,
Complainant generally must prove that PCBs were found in concentra-
tions of 50 ppm or more to establish a violation of the regulations.
See n. 9, supra.
13/ The presiding officer's conclusion that representative samples
were necessary to prove disposal violations was based in part on
§761.10(g) of the regulations. Initial Decision at 26. This section
provides guidance to owners or users of "waste oils" defined in
§761.2(ii) as consisting principally of petroleum derived products
on how to sample waste oils which have been collected in a common
container. It allows them to combine waste oil from separate sources
in a common container or "batch" for purposes of analyzing the PCB
concentration so long as representative samples, as described in the
regulations, are taken. As to the necessity of taking representative
samples, the presiding officer held that Complainant, in attempting
to establish a violation of the law, must be held to the same
standard as owners and users.
-------
correct insofar as it describes the evidence needed to prove the
!4/
PCB concentration of the contents of the tank as a whole. To
*
do that Complainant needed a representative sample with a PCB
concentration in excess of 50 ppm. Complainant's sample, however,
was only a "grab sample," and, as such, according to the presiding
officer, represented nothing more than the particular spot sam-
pled. Initial Decision, finding 27. A representative sample,
in contrast, is one which, as stated by Respondent's expert wit-
ness, is "small enough to bring into the lab that when analyzed
would give you results that would be the same as any other sample
that you took from that tank at that time." Tr. 377. See also
Tr. 310, 448-450. A grab sample clearly cannot satisfy that re-
quirement; nevertheless, as explained below, a grab sample may
still have probative value.
Apparently, because the sample was not represe-ntat ive, the
presiding officer also found that there was no evidence that Re-
spondent attempted to dilute the PCB concentrations in its waste
to below 50 ppm; nor was there any evidence of PCBs having been
added to the storage tank in concentrations of 500 ppm or greater.
Therefore, he concluded that the provisions of the regulations
relating to dilution were not applicable. Initial Decision at
27. I disagree. The purpose of the provision governing dilution
14/ Complainant argues on appeal that, in any event, the sample in
question was representative of the "top" layer of the wastes in the
tank. However, based on expert testimony presented by Respondent,
there can be no question that the sample was not representative of
the contents of the tank or even an undefined "layer." Tr. 448-450.
Because it is determined that a representative sample is not re-
quired for purposes of this case, it is unnecessary to address this
issue in greater detail.
-------
10
is to ensure that the concentration of PCBs above the 50 ppm
cutoff is not artificially lowered so as to circumvent the .
* »
requirements for disposal by one of the approved processes
authorized in the regulations, such as by incineration in an
EPA approved incinerator. This "anti-dilution" policy is found
IS/
in the definition of PCBs at 40 CFR §761.2(s), which provides
that, notwithstanding the general exclusion of PCBs below 50 ppm
from the scope of the regulation's coverage, "[a]ny chemical sub-
stances and combinations of substances which contain less than
50 ppm PCBs because of any dilution, shall be included as PCB and
15/ See n. 2 supra. The anti-dilution policy is also reflected
in the "batch testing" regulations referred to in n. 13, supra,
40 CFR §761.10(g)(2}, which deal specifically with waste oils:
(2) Owners or users of waste oil may use the
following procedures to determine the PCB concentra-
tion of waste oil:
(i) Waste oil from more than one source may be
collected in a common container, provided that no
other chemical substances or mixtures, such as non-
waste oils, are added to the container.
(ii) For purposes of complying with the marking
and disposal requirements, representative samples may
be taken from either the common container or individual
containers to determine the PCB concentration Except
[sic] that if any PCBs at a concentration of 500 ppm
or greater have been added to the container then the
total container contents must be. considered as having
a PCB concentration of 500 ppm or greater for purposes
of complying with the disposal requirements of this
subpart. For purposes of this subparagraph, represen-
tative samples of waste oil are either samples taken
in accordance with American Society of Testing and
Materials D-923 method or samples taken from a contain-
er that has been thoroughly mixed in a manner such that
any PCBs in the container are uniformly distributed
throughout the liquid in the container. (Emphasis added. )
(next page)
-------
11
PCBs [over 50 ppm PCBs] . . . ."
In the present case, the inspector obtained a grab sample
sample SO^ --..which allegedly, had a PCB concentration of
/
4,400 ppm. Although this grab sample cannot be regarded as
representative of the contents of the tank as a whole, it seems
inescapable that the sample, if properly .analyzed,, is circum-
15/ continued
The preamble to the batch testing regulation, 40 CFR §761.10(g),
explains:
E. Batch Testing of Mineral Oil Dielectric Fluid
Testing of mineral oil dielectric fluid and
waste oil from sources that are otherwise assumed
to contain PCBs at a concentration between 50 ppm
and 500 ppm can be performed on samples taken from
collection tanks ("batch testing"). This is per-
mitted so that oils from multiple sources can be
collected and tested without requiring a separate
test of each transformer each time a disposer wants
to evaluate his disposal options.
The prohibition against dilution, however, has
not changed. The new testing option does not permit
the deliberate dilution Of the collected oil (assumed
to contain PCBs above 50 ppm) with PCB-free or low PCB
fluids to reduce the concentration of PCBs in the re-
sultant mixture below 50 ppm. Further, the option does
not permit the deliberate addition of PCB wastes with
concentrations greater than 500 ppm to the tank in order
to avoid the more stringent disposal requirements foF
high-concentration wastes. If such high-concentration
wastes are added to the tank, then the entire tank con-
tents must be disposed of in compliance with require"-
ments for wastes containing 500 ppm PCBs or greater,
even if a sample of the aggregate tank contents reveals
a concentration below 500 ppm.fnthis circumstance,
the tank contents cannot be used as dielectric fluid;
the tank contents must be disposed of in a high tem-
perature incinerator. (Emphasis added.) (44 Fed. Reg.
31514, 31520-21, May 31, 1979).
-------
12
stantial evidence that PCBs were added to the tank in conce.n-
v
trations at least as high as those found in the sample, if not
16/
higher. '.Therefore, regardless of the actual PCB concentra-
tion level of the tank when its contents were incinerated, a
presumption is raised, by the anti-dilution provisions, that
the contents of the tank contained PCBs at a level of concen-
il/
tration requiring disposal in an approved incinerator. Of
course, an argument could be made that the inspector, when he
removed the grab sample, also removed the only PCBs from the
tank in concentrations over 50 ppm, thereby "saving" Respondent
from a disposal violation when the contents of the tank were
subsequently incinerated; however, this argument is plainly
far-fetched. Instead, it is more plausible to infer that after
the grab sample was taken, the tank still contained residues of
PCBs, and that those residues were, in fact, disposed of in
16/ Respondent argues in its appellate brief that the high concen-
trations of PCBs found in SO± may have been due to aggregation of
materials with low concentrations (below 50 ppm) of PCBs, i.e., the
paint pigments. However, there is no evidence in the record to
support this "aggregation" theory. Therefore, Respondent's argument,
based as it is on mere speculation, must be rejected, and cannot, by
itself, overcome the presumption that arises from finding PCBs in
concentrations of 4,400 ppm in the tank.
17/ However, as explained in the text, under the heading "Sample
Analysis," Complainant has failed to prove that the sample did in
fact contain PCBs in concentrations of 4,400 ppm, and, therefore,
the disposal charge has been dismissed.
-------
13
IB/
Respondent's unapproved incinerator. In any event, the
presumption that arises from finding the high concentration
PCBs in the tank, if unrebutted", makes it unnecessary to
delve further into these arguably speculative concerns. The
presumption alone is a sufficient basis for establishing a
violation.
While the preceding discussion demonstrates that Complain-
ant's failure to obtain a representative sample is not necessar-
19/
ily fatal to proving a disposal violation, the analysis of
the PCB concentration in the grab sample obviously must be
properly conducted to prove the violation. As explained below,
the results of Complainant's analysis are not reliable, and the
disposal charge in the complaint is, therefore, dismissed.
Sample Analysis
Sample SO^ was analyzed by gas chromatography with electron
capture (GCEC). Because the sample was classified as an oil
sample, the applicable protocol required that it first be
examined for the presence of suspended matter. Tr. 133. A
portion of the sample was then weighed and dissolved in hexane.
18/ Nothing in this final decision should be read as condoning the
sampling techniques employed by the Complainant. It is clear from
the record that the inspector had no clear cut sampling plan before
arriving at Respondent's facility; that if a representative sample
had been necessary, it is unlikely that one would have been obtained;
and that the inspector handled the materials in a negligent manner,
e^.g. , by throwing a glass bottle used to obtain the sample to the-
ground from a height of 30 feet, so that it broke. Tr. 21-23.
19/ Nevertheless, sound enforcement procedures dictate that repre-
sentative samples be obtained whenever feasible.
-------
14
PCBs were then eluted from the sample, and by use of an evapor-
ator, the extract was concentrated, and injected into the ga's
chromatograph, which separates the various components of the
sample, producing a strip chart recording or "chromatogram."
The analyst determines if additional cleanup of the sample is
needed after examining the chromatogram. Identification of
PCBs in the sample is made by comparing the chromatogram of the
sample with "standard" chromatograms for known PCBs. The con-
centration of PCBs in the sample is determined by use of a
formula comparing the standard and sample. Based on these pro-
cedures, the presiding officer found that the "reported PCB
concentrations, to wit: 4,400 ppm for sample SO^ . . . are
accurate." Initial Decision, conclusion 2, and subsidiary find-
ings of fact, 6 and 16. On appeal, Respondent advances several
reasons in support of its contention that the results of Complain-
ant's analysis of sample SO} should not be accorded any eviden-
tiary weight; however, for brevity's sake, the discussion below
is limited to the one reason with which I am in full agreement.
Respondent contends that sample SO} should not be accorded
any evidentiary weight because Complainant's calculation of the
PCB concentration is so poorly documented that the results, i.e.,
PCBs in concentrations of 4,400 ppm, are not credible. Accord-
ing to Respondent, Complainant's computer printout shows that
the PCB concentration of sample SO} is actually 4,400 parts per
billion; therefore, the PCB concentration, when measured in
-------
15
parts per million, is really equivalent to 4.4 ppm, well
below the regulatory limit of 50 ppm. See Tr. 330-332. In
response, Complainant asserts that the computer printout for
sample SO} does not reflect the final calculation because the
analyst must have revised the results by hand to take into
account the so-called "dilution factor," i.e., the factor that
makes allowances for any solvents added to the original sample.
The presiding officer upheld the Complainant, stating that "the
tests for [sample] SO} . . . have not been shown to have been
improperly conducted or calculated." Initial Decision at 26.
On appeal, Respondent argues that the presiding officer
misallocated the burden of proof. I disagree. Nevertheless, I
am convinced that Complainant did not prove that the concentra-
tion of sample SO} exceeded 50 ppm. Complainant is required by
§22.24 of the consolidated rules to prove a violation by a pre-
ponderance of the evidence. 40 CFR Part 22 (1980); see also
SEC v. Steadman, 450 U.S. 91, 101 S.Ct. 999, 67 L.Ed.2d 69 (1981),
Complainant also has the burden of going forward with the evi-
dence to establish a prima facie case. Id. In this specific
instance, Complainant presented evidence in the form of an ex-
hibit (Complainant's .Ex. 10, Table 1) which purports to show that
the PCB concentration of SO} is 4,400 parts per million; however,
as Respondent correctly points out, the computer printout reports
the concentration as 4,400 per bill ion, an amount which is equiva-
lent to only 4.4 ppm. Complainant attempted to explain the dis-
-------
16
crepancy by presenting testimony to the effect that the com-
puter which is used to perform analyses on numerous samples
-"- is not necessarilyreset or'changed between samples; and,
as a consequence, it is sometimes necessary for the analyst to
revise the results by hand to reflect the fact that, for a
particular sample, such as sample SOj, the computer may still
be using a dilution factor employed in a previous sample.
Tr. 233. According to Complainant, the analyst, who is in a
position to know whether the computer has been reset, will, if
necessary, revise the results to take the correct dilution
factor into account. Thus, in this manner, Complainant at-
tempts to justify its contention that sample SO± contained PCBs
in a concentration of 4,400 ppm, rather than 4.4 ppm.
Although Complainant's explanation may be plausible, it is
not supported by any solid evidence; instead, it is based on
speculation" and, therefore, is not sufficient for purposes of
sustaining Complainant's burden of proof. The analyst who sup-
posedly knew whether the computer results had to be adjusted for
the dilution factor was not presented as a witness for Complain-
ant; nor was Complainant's account of what happened ever support-
ed by any documentation, despite the fact that the Director of
the EPA laboratory where the analysis was performed testified
that documentation was essential to good laboratory procedure
and, in addition, he agreed that "you must document in some
fashion the manner at which you arrived in [sic] the final
-------
17
dilution on that sample." Tr. 119. This documentation, if
it ever existed, was never put in the record of the proceeding,
even though Respondent requested that "someone who knows the- --
file calculate how they arrived at the parts per million of
PCBs for sample SO^. . . ." Tr. 200. Complainant, in response
to this request, did give" Respondent additional information
after the hearing was over; however, the exact nature of that
20/"
information does not appear in the record. Its absence
cannot be ignored. The logical inference to draw from Complain-
ant's failure to document the dilution factor is that there is
no such documentation; as Complainant's own witness agreed,
some type of documentation is needed to comply with good labora-
tory procedures. Therefore, even if the analyst who performed
the analysis of sample SOj had testified at the hearing, the
lack of documentation would still be a matter of serious concern.
Complainant's case rests on the contention that sample -SO^ con-
tained PCBs in concentrations of 4,400 parts per million; how-
ever, Respondent was able to cast considerable doubt on the
validity of this contention by showing, through cross-examination
of Complainant's witnesses, that the only solid evidence in the
record indicates that the concentration of the sample was only
4,400 parts per billion, i.e., an amount equivalent to 4.4 ppm.
20/ The parties filed post-hearing affidavits in an attempt to
further bolster their respective positions; however, these affi-
davits neither mention the dilution factor nor include the infor-
mation requested by Respondent.
-------
18
k
The burden of proof therefore shifted back to Complainant to
provide evidence, not merely supposition or argument, of how
the so-called dilution factor.Was used in the laboratory pro-
cedures followed by Complainant's analyst. This evidence,
whether in documentary form or otherwise, was not forthcoming;
therefore, it must be concluded that Complainant has not met
its burden of proving, by a preponderance of the evidence,
that the PCB concentration of sample SOj exceeded 50 ppm.
CONCLUSION
For the reasons stated, the presiding officer's Initial
Decision dismissing the charges against Respondent is affirmed.
All findings of fact and conclusions of law consistent with this
decision are incorporated in this final decision. Complainant's
"grab" sample, even though it was not a representative sample,
does have probative value; however, in this case, Complainant's
analysis of the sample_failed to establish that it contained
concentrations of PCBs of at least 50 ppm. Therefore, Complain-
ant did not prove by a preponderance of the evidence that Re-
spondent disposed of PCBs in concentrations over 50 ppm in
violation of the regulations. Accordingly, the charges against
Respondent are dismissed.
So ordered.
Ronald L. McCallum
Judicial Officer (A-101)
Dated: APR 4 1934
-------
CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing Final Decision
In the Matter of Robert Ross and Sons, Inc., TSCA Appeal No. 82-4,
were sent to the following persons, irv the manner indicated:
By 1st Class Mail,
postage prepaid:-
By hand delivery:
Eric Dunham, Esq.
Michael Walker, Esq.
Office of Regional Counsel
EPA, Region V
230 South Dearborn St.
Chicago, IL 60604
Richard D. Panza, Esq.
Wickens, Herzer & Panza Co.,
1144 West Erie
Lorain, OH 44052
L.P.A.
Robert Ross
Gary Ross
Robert Ross & Sons
394 Giles Road
Grafton, OH 44104
Inc.
Mary Langer
Regional Hearing Clerk
EPA, Region V
230 South Dearborn St.
Chicago, IL-60604
Hon. Spencer T. Nissen
Administrative Law Judge (A-110)
EPA Headquarters
401 M St., S.W.
Washington, DC 20460
Dated: APR 4 1984
M. Gail Wingo
Secretary to the
Officer.
Judicial
-------
31
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
IN THE MATTER OF ) Docket No. TSCA VII-83-T-121
KANSAS CITY STAR COMPANY, ) . *f~ ^"^
) ^ v----..--
Respondent) -^.
1. Toxic Substances Control Act ("TSCA" or "the Act") - Records',->-\
7*. %*$
which Respondent was required to keep of, and subsequent toj'a
fj\
visual inspection, were "required records", having public aspects,
required by law to be kept to provide suitable information of
transactions and conditions which are the appropriate subject of
government regulations.
2. TSCA - The proper designation by the regula-tory agency of
certain records to be kept necessarily implies an obligation to
produce them and Respondent impliedly consented to keep and produce
r
subject records as a condition of its being able to use polychlori-
nated biphenols ("PCBs"), the regulatory activity involved.
Therefore, Respondent did not possess the right to be advised that
it could refuse to permit said inspection and to produce records.
3. TSCA - The Act provides, 15 USC 2614(4), that it is and was
unlawful to refuse to permit subject inspection as required by
i
15 USC 2610, and where the EPA inspector produced his credentials
and gave Respondent actual as well as written notice of the
character and extent of the inspection madie, Respondent's rights
were not violated by said inspection nor by the Agency's request
for records Respondent was required to keep.
-------
-2-
4. TSCA^ - The Act contemplates that inspection of Respondent's
premises should be made where the Agency either has suspicions
that a violation is occurring or seeks assurance that pertinent
regulations are not being violated.
5. TSCA - Remedial legislation is broadly construed and liberally
interpreted to effectuate its purposes and should here be strictly
enforced to protect public health and the environment.
6. TSCA - The nature, circumstances, extent and gravity of a viola-
tion of the Act are considered irt determining the amount appropriately
-'.. «L.
to be assessed as a gravity-based civil penalty "(GBP"). Other fac-
tors, including the violator's culpability and history of compliance,
may be considered to determine if the amount of the gravity-based
penalty should be raised or lowered.
Appearances
For Respondent:
Michael T. White, Attorney
G. Edwin Proctorv Jr., Attorney
Paul E. Vardeman, Attorney -
Polsinelli, White & Vardeman, P.C. f
4705 Central
Kansas City, Missouri 64112
For Complai nant:
Henry F. Rompage, Attorney
Office of Regional Counsel
U.S. Environmental Protection Agency
Region VII
324 East llth Street
Kansas City, Missouri 64106
-------
-3-
INITIAL DECI--SION
On September 15, 1983, Complainant (hereinafter "EPA" or
"the Agency") filed subject Complaint, which was served on the
registered agent of Respondent, Kansas City Star Company (herein-
after "Respondent") on September 20, 1983, charging Respondent
with violation of 761.30(a) I/ in that an inspection by an EPA
employee on July 19, 1983, revealed that three PCB transformers 2/
"had not been inspected" by Respondent prior to September 24, 1982,
" . . . or following September 24, 1982" (and thus no records were
developed maintaining information by said regulation required),
which renders Respondent in violation of the Toxic Substances
Control Act ('hereinafter "TSCA" or the "Act" ), Section 15(1),
15-USCA §2614(1). For said violation, Complainant proposes that
a civil penalty be assessed in the amount of $17,000 pursuant to
Section 16(a) of TSCA, 15 USCA §2615(a). Said .Complaint further
charges Respondent with violation of 40 CFR 761.180(a), which
required and now requires' Respondent, beginning July 2, 1978, to
r
develop and maintain records on the disposition of PCBs and PCB
items (as defined 40 CFR 761.3(x)) and to prepare an annual document
each July 1, covering the previous calendar year, which must include
information specified at said Section 761.180(a), subsections (1)
through (3)., It is proposed that an additional civil penalty be
assessed in the amount of $8500 for Respondent's failures to comply
with said regulation as in said Complaint set forth.
I/ Said section, effective September 24, 1982 (47 FR 37342
et seq. , August 25, 1982), includes th'e'provisions of a
rule-related Court Order and enforcement notice published on
March 10, 1981 (46 FR 16089-95), which provisions have been
in effect s.ince May 11, 1981.
£/ 40 CFR 761.3(y) defines "PCB transformer" as any transformer
that contains 500 parts per million (ppm) PCB or greater.
-------
-4-
In jts Answer, .filed September 27, 1983, Respondent .denied
the allegations that said P-CB transformers had not been inspected
in accordance with said regulations; and, in its First Amended
Answer, filed on or about March 23, 1984, Respondent denies the
allegation that it failed to develop records on the disposition
of PCBs and PCB items; and it. further denies that it failed to
prepare_annual documents for the calendar years 1978, 1979, 1980
and 1981.
A prehearing conference was held on January 26, 1984, and
the parties agreed to continue to negotiate in an effort to
arrive at a settlement of outstanding issues which included the
amount of the civil penalties proposed to be assessed.
An adjudicatory hearing was held in the Federal Courthouse,
811 Grand Avenue, Kansas City, Missouri, in Court Room 7 (Room 401)
on Thursday, March 29, 1984. The parties have -filed herein their
proposed findings of fact, conclusions of law, briefs and arguments.
On the basis of the entire record, including said submissions
r
by the parties, I have arrived at. the following
Findings of Fact
1. Respondent, --Kansas City Star Company, is a corporation engaged
in the business of newspaper publishing, with two daily editions
being published Monday through Friday and one edition being
published on each Saturday and Sunday. Said company's publica-
tions require its operation 24 hours a day, seven days a week.
2. In order to operate said business, as aforesaid, Respondent
maintains a series of electrical transformers to power its print-
ing presses, machinery and equipment.
3. On July 19, 1983, EPA Inspector (Consumer Safety Officer) Morris
conducted an inspection of Respondent's premises, including its
-------
-5-
electrical transformers. Three of-seven transformers inspected
were found to be PCB transformers (Transcript ["Tr."] 4).
4. Inspector Morn's presented his credentials to Charles Rothganger,
agent in charge of Respondent's premises at or during said inspec-
tion, and gave him written notice of said inspection (Exhibit ["Ex."]
Complainant ["C"]-l, Tr. 15; ,15 USC §2610).
5. Subject three PCB transformers were located on Respondent's
premises, one at the S substation and two at AC-3 air conditioning
room (Tr. 20). Inspector Morris was told by Respondent's employee
that said transformers were PCB transformers and the nameplates
on said transformers further confirmed they were PCB transformers,
as one contained Pyranol and the other two Askarel (Tr. 13;
Ex. C-l).
6. Inspector Morris did not see employees or electricians work-
ing near or around subject transformers (Tr. 2L).
7. Though Inspector Morris' notice of inspection was sufficiently
extensive to include an inspection for "Sale of waste oils"or
PCB contaminated equipment," no such sales were found or noted
and, therefore, no violations of this character were alleged in
subject Complaint (Tr. 23, 25).
8. The PCB transformer in substation S contained 756 gallons
of oil and its capacity was 1500 KVA. No leaks or evidence of
prior leaks we re observed by Inspector Morris (Tr. 32-33).
i
9. The two PCB transformers in AC-3 (air conditioning room) had
capacities of 1000 KVA and 1650 KVA (Tr. 34). No leaks or evi-
dence of prior leaks were found (Tr. 35).
-------
-6-
10. ThoiKjh Respondent had tests for acidity performed periodically
on all its transformers (Ex. Respondent ["R"]-l; Tr. 118), it did
not, prior to said inspection of July 19, 1983, perform quarterly
inspections on said PCB transformers and maintain a record con-
cerning any such inspections, in conformity with 40 CFR 761.30,
nor did Respondent develop records, beginning in 1978, nor prepare
v ₯
annual documents on July 1 for the years 1978, 1979, 1980, or
1981, as required by 40 CFR 761.180(a) (Ex. C-l; Tr. 46-47).
11. On this' record, there was an instance, in 1981, when one of
the PCB transformers developed a leak (moist and dripping). The
leak was promptly discovered, General Electric Company repairmen
were called immediately to clean up leaking dielectric fluid and
then promptly repair the leak. This was the only instance, in
over 16 years, that witness Rothganger could recall that Respond-
ent has experienced a leak from its said equipment (Tr. 71-72).
12. Though inspections were not made in conformity with pertinent
regulations, and observations then made were not properly recorded,
r
visual observations of the said PCB transformers were made on a
daily basis by various personnel from among 13 electricians, seven
engineers and 16 machinists employed full-time by Respondent who,
along with 112 other employees, has the responsibility of the
maintenance for building services and equipment which includes 45
press units and nine total presses (Tr. 61-62).
13. Since said inspection in July, 1983, Respondent has retained
the services of PPM, Inc. in order to achieve compliance with
EPA requirements and to furnish advice respecting safety and
fire precautions; and has rehired Herb Lewis, formerly employed
as Respondent's Assistant Project Director, to monitor compliance
with EPA regulations (Tr. 82).
-------
-7-
14. Further remedial measures instituted by Respondent, sj'nce
subject, inspection and following filing of subject Complaint,
include the employment of a new safety director, purchase of C02
bottles and safety clothing, construction of a containment berm
around subject transformers, installation of fire alarm and
sprinkler systems, installation of an ADT system and an in-house
Kidde System to monitor for heat and smoke build-up (Tr. 86-89),
and an on-going program to inform its employees respecting pre-
cautionary measures and regarding compliance with EPA requirements
(Tr. 93-96).
Conclusions of Law
1. 15 USC Section 2610 (Section 11) of the Act provides that
Inspector Morris, as the duly authorized representative of the U.S.
EPA Administrator, had authority to inspect Respondent's premises
and its PCB transformers containing 500 ppm PCELs or great.er
(40 CFR 761.3(x)). Failure to permit subject inspection would have
violated 15 USC §2614(4) and would have therefore been unlawful.
f
2. The records sought by such inspection were not protected by
either the 4th or 5th Amendment of the U.S. Constitution from com-
pelled disclosure for the reasons that (1) the privilege against
self i n c r i mi nation protects only individuals and not a corporation;
and (2) said records were "required records", i.e., records having
"public aspects" and required by law to be kept in order that there
may be suitable information of transactions which are the appropri-
ate subject's of government regulation; therefore, a warrantless
search was not unreasonable (In re Grand 'iTury Proceedings,
601 F.2d 162, I.e. 168(7-10), and cases there cited; Camara v.
Municipal Ct.. 87 S.Ct. 1727, 387 U.S. 523, I.e. 534-535(10);
Cochran v. U.S. . (1961), 291 F.2d 633).
-------
-8-
t *
3. Subject inspection was made upon the presentation by the
inspector to Respondent's agent and employee, Charles E. Rothganger,
of appropriate credentials (Ex. C-l, C-2; Tr. 15).
4. Respondent's said employee was advised, on presentation of
said credentials, that EPA Inspector Morris "was there to do a
<_
routine PCB inspection" and that Morris wanted to see Respondent's
PCB equipment, if any, and any records maintained concerning PCB
material (Tr. 15). By said statement from Inspector Morris,
Respondent received actual notice of the extent and purpose of
said inspection.
5. Respondent's agent and employee, in addition to said actual
notice, received and acknowledged receipt of a copy of a
written notice of said inspection entitled "TSCA Inspection -
Summary of Observations" (Ex. C-2).
6. Tests made to determine acidity of transformer dielectric
cooling fluids, in an effort to"prevent "arcing",_which will
cause damage to said transformers, did not conform to the
requirments of 40 CFR 761.30, which requires quarterly inspec-
tion of said PCB transformers "for leaks" and the further
requirement of said §761.30(a)(l)(iv) and subparts thereof,
requiring that Respondent prepare and maintain records and
.<
maintenance history which shall be available for inspection by
the Agency for at least three years after the date the subject
transformer is disposed of.
7. Remedial legislation should be broadly^ const rued and
liberally interpreted to effectuate its purposes, and to achieve
Congressional intent.
-------
-9-
8. On this record, Respondent violated 40 CFR 761.30(a).by
failing to make visual inspections and to maintain records of
inspection and maintenance history as by said section required,
and an appropriate civil penalty should be assessed for said
violation.
9. On this record, Respondent violated 40 CFR 761.180(a) in
failing__to develop and maintain records and to prepare annual
documents for the calendar years 1978-1981, as by said regula-
tion required, and an appropriate civil penalty should be
assessed for said violation.
Discussion
Respondent's suggestion that the subject inspection conducted
by EPA Inspector Morris violated the provision of 15 USC §2610
which provides that "such inspection can only be made upon the
presentation of appropriate credentials of a written notice to
the owner" is hereby rejected. Presentation of proper credentials
was made (see Finding 3, supra) and Respondent's employee in
t
charge was then advised of the nature and extent of the inspection
to be. made. Therefore, actual notice was given and received.
There was no objection then made, but said employee freely con-
sented to the inspection and subsequently gave a signed statement
(Ex. C-l) concerning the PCB transformers which were the subject
of the inspection and also signed a receipt for a "TSCA Summary
of Observations" (Ex. C-2) upon completion of said inspection
some two to three ho.urs following the inspector's arrival at
Respondent's premises. It is clear on thi's record that the
records required to be prepared and maintained pursuant to
40 CFR 761.30 had not been so kept and maintained because no
-------
-10-
inspecti^ns had been made by Respon-dent which conformed to that
required by the regulations. It must be recognized that we are
here considering remedial legislation which the Courts have
repeatedly held should be broadly construed and liberally inter-
preted to effectuate its purposes and to achieve Congressional
intent. The purposes ^f subject regulations and the statute are
' **"
to protect the public health and the environment. (See Tcherepin
v. Knight. 389 US 332, 88 SCt.548 (1967); Cattlemen's Inv. Co. v.
Fears. 343 FS 1248, 1251 (1972)).
In re: Grand Jury Proceedings (Grand Jury), 601 F.2d 162 (1979)
discusses, in principle, the obligation which is here applicable
to Respondent. Even the protection of the 5th Amendment (applic-
able only to individuals, I.e. 167(4-6)) does not extend to
"required records" - required by law to be kept in order that
there may be suitable information of transactions which are the
appropriate subjects of government regulation, and the enforcement
of restrictions validly established; and the "required records
t
doctrine" includes records required by Administrative regulations
(see Grand J u ry, I.e. 168 (11, 12)). Said case also addresses
the erroneous suggestion by Respondent that it had the "right to
refuse" such inspection and should have been so advised, apparently
characterizing said inspection as an "unreasonable search" under
the 4th Amendment of the U.S. Constitution. 3^/ Grand Jury states,
I.e. 171 (21, 22):
2/ Any Constitutional objection, if such was intended, was
not timely raised and thus Waived (Cantre 11 v. City of
Caruthersville, DC MO 1955), 128 FS 637, 222 F.2d 4Z«).
-------
-11-
" . . . The proper de'si gnat ion by (the government)
of certain records to be kept . . . necessarily
implies an obligation to produce them . . . These
obligations to keep and produce the records are in
a sense consented to as a condition of being able
to carry on the regulated activity involved ..."
(Emphasis supplied.)
The information sought by subject inspection was clearly
relevant to its investigative authority and such investigations
v t.
are justified where an agency has suspicions that a violation is
occurring or where it seeks assurance that pertinent regulations
are not being violated - US v. Morton Salt Co., 70 SCt. 357,
338 US 632; DeMasters v. Arend, CA ORE, 313 F.2d 79, 88 (12-14).
More importantly, 15 USC §2614(4) provides that it is unlaw-
ful for Respondent to fail or refuse to permit . . . inspection
as requi red by §2610.
In its brief, Respondent admits it failed to maintain quarterly
records as required by 40 CFR 761.30(a) (Conclusion of Law 8,
page 12); but submits that the method and frequency of inspection
conducted by Respondent substantially complied. The submission
r
is apparently a reference to the fact (Finding No. 12, page 6
hereof) that over 100 persons, under Mr. Rothganger's supervision,
many of whom possess necessary expertise to perform the requi red
inspection, pass the point where said transformers are located
and presumably would observe any leak, if such existed. The
weakness of Respondent's position is best expressed by the old
adage that "what is everybody's business is nobody's business."
The further provision at 761.30(a) (1) (iv) that "records of
inspection and maintenance history" shall "be maintained, and
the information required to be included in such records connotes
the practical requirements of sa'id section that Respondent assign
to some employee the duty to perform said visual inspection and
-------
-12-
then and there note and maintain any findings made. In addition
to providing a systematic means of.protection to all who frequent
the locations, the records contemplated and required are a re-
minder to Respondent of its duty with respect to the PCB 4/
equipment and a means by which the EPA can be assured that pre-
ventive measures are being used at all times and that incidents
_?
have not occurred, or are not likely to occur, which might
endanger the public or the environment.
Regulatory measures and remedial legislation must be
strictly enforced. Any failure to apply sanctions where the
Act - and the regulations promulgated pursuant thereto - are
violated will invite violations in increasing numbers. Increasing
indifference to regulatory provisions will frustrate, if not
defeat, the scheme of regulation which the Act'contemplates
(Wickard v. Filburn. 317 US 111, 63 SCt. 82). .For this reason,
such violations are not considered trivial but, rather, of a
serious nature. The same reasoning applies to the importance
r
of preparing annual documents for the years 1978 through .1981.
Civil Penalty
The statutory criteria for assessing penalties under TSCA,
Section 16(a), are listed in Section 16(a)(2)(B), 15 USC
2615(a)(2) (B), which provides as follows:
4Y 47 FR 37342, I.e. 37346 (Preamble, August 25, 1982), further
points out,."An inspection program also keeps company personnel
informed and alert to the potential impact of PCBs discharged
from electrical equipment."
-------
-13-
In determining the anrount of a civil penalty,
the Administrator shall take into account th'e
nature, circumstances, extent, and gravity of
the violation or violations and, with respect
to the violator, ability to pay, effect on
the ability to continue to do business, any
history of prior such violations, the degree
of culpability, and such other matters as
just ice may require.
To provide guidance to the assessment of penalties under
Section 16, the EPA enforcement staff has issued guidelines
setting forth the general policies it will follow and has sup-
plemented these guidelines with a specific policy for assessing
penalties for violations relating to polychlorinated biphenols
("PCBs") and other toxic substances. ^/
The procedural rules for these proceedings require that I
consider the guidelines and PCB penalty policy in determining
the appropriate penalty, and that if I assess a penalty differ-
ent in amount from that proposed in the Complaint, I must give
my reasons therefore. _6/
The PCB penalty policy uses a matrix to establish an initial
r
penalty based upon the nature, extent, circumstances and gravity
of the violation. The initial penalty can then be adjusted
upwards or downwards depending upon consideration of the other
statutory factors, i.e., culpability, history of such violations,
ability to pay, ability to continue in business and such other
matters as justice may require. 7/
.5/ See 45 fR 59770-59783 (September 10, 1980) referred to as
the PCB Penalty "Policy, providing Internal Procedural Guide
lines. They are not regulations (I.e.' 59770, col. 1).
I/ 4D CFR 22.27(b).
]_/ 45 Federal Register 59777 (September 10, 1980).
-------
-14-
The ^regulations violated by Re-spondent are both characterized
by the Agency (45 FR 59771, col. 3; September 10, 1980), as
"control-associated data gathering requirements" which enable
the Agency to evaluate the effectiveness of the regulation, and
to monitor compliance. As indicated on the matrix, three other
factors other than "nature", relating to the violation, must be
determined, namely, circumstances, extent and gravity. These
four factors yield a Gravity Based Penalty (GBP) to which adjust-
ment factors can be applied where appropriate. The quantity of
dielectric fluid - 1500 to 2000 gallons (Findings 8 and 9) - is
the principal basis for determining "extent" of potential harm
as "major." JJ/ "Circumstances" is used to reflect on the
probability of the assigned level of extent of harm actually
occurring. The principal circumstance to be here considered is
the^effect of each of subject violations on the. EPA's ability to
implement or enforce the Act. I find, in this record, that the
x
761.30 violation should be considered Medium range and the
r
761.180 violation is in a Low range on the matrix.
s
By determining the above factors (nature, extent and circum-
stances), we have determined the overall seriousness (or gravity)
of the violations. On this record, I find that a consideration
of culpability and history are mitigating factors that warrant
a downward adjustment of the GBP otherwise called for under the
guidelines. Respondent's action to avoid "arcing" resulted in
See discussion 45 FR 59772, col. 2. The theory is that
violators should be penalized for their violative conduct;
and the "good" or "bad" luck of whether the proscribed
conduct actua1ly caused harm should not be an overriding
factor. Because of the quantity of PCBs here involved,
the "extent" of potential^ damage will be considered "major."
-------
-15-
the procurement of professional testing for acidity - the efficient
cause of such hazard.. Historically, Respondent's concern has been
directed to avoiding damage to the transformers, but such concern
would, of necessity, involve visual inspection to some extent with
some regularity. Such extent and regularity are only approximated
in this record and such inspections would obviously not conform to
regulatory standards. As to the record keeping (concerning only
the tests for acidity), it is not at all helpful to EPA's responsi-
bility to "implement or enforce the Act", i.e., to "evaluate the
effectiveness" of the pertinent regulations, and to monitor com-
pliance. As pointed out hereinabove, EPA's failure to strictly
enforce the regulations will invite increasing violations of
this character which could eventually frustrate - even defeat -
the scheme of regulation critically important to maintain the
measure of control of PCBs needed for protection of the public
and the environment. Historically, on this record, Respondent
has, in over 16 years, experienced but one "leak", which was
f
repaired and cleaned up expeditiously by General Electric Co.
(see Finding 11, supra). Respondent's handling of this incident
indicates an understanding of the hazard involved and its general
concern for safety. Remedial measures taken by Respondent since
subject inspection, and which are recounted in part hereinabove
(Findings 13 and 14), are commendable and should and will be
considered.
Turning to the second violation (of 40 CFR 761.180), it is
clear that Respondent did not develop and "maintain records on
the disposition of PCBs and PCB items and (from such data) pre-
pare annual documents. This violation continued for four years.
-------
-16-
In tjie premises, I find that an appropriate GBP to be assessed
for the violation of Section 761.30 is $10,000 and that, because
of findings hereinabove set forth, an adjustment of 20% is
warranted and I therefore find the assessment of $8,000 appropri-
ate. I further find that a GBP of $3,500 should appropriately be
assessed for the said violation of Section 761.180. On the basis
of the findings hereinabove, including the institution by Respondent
of remedial measures which will be adhered to in the future, I find
that said amount should be adjusted to $2,800.
ORDER B_/
Pursuant to Section 16(a) of the Toxic Substances Control
Act (15 USC 2615(a)), a civil penalty in the total sum of
$10,800 is hereby assessed against Respondent, Kansas City Star
Company, for the violations of the Act found herein.
Payment of the full amount of the civil penalty shall be
made within 60 days of the Service of the Final Order upon
Respondent by forwarding to the Regional Hearing Clerk, U.S.
t
EPA, Region VII, a cashier's check or certified check payable
to the Treasurer, United States of America.
DATE: June 19. 1984
Marvin E. Jones
Administrative Law Judge
2/ Unless an appeal is taken pursuant to the Rules of Practice,
40 CFR 22.30, or the Administrator elects'to review the
Decision on his own Motion, this Initial Decision shall
become the Final.Order of the Administrator (40 CFR 22.27(c)).
-------
CERTIFICATION.. OF SERVICE
I hereby certify that, in accordance with 40 CFR 22.27(a),
I have this date forwarded to. the Regional Hearing Clerk of Region VII,
U.S. Envi ronnental Protection Agency, the Original of the foregoing
Initial Decision of Marvin E. Jones, Administrative Law Judge, and
have referred said Regional Bearing Clerk to said section which
f urther~~provides that, after preparing and forwarding a copy of
Initial Decision to all parties, she shall fo'rward the Original,
along with the record of the proceeding, to the Hearing Clerk,
EPA Headquarters , Washington, D.C., who shall forward a copy of
said Initial Decision to the Administrator.
DATED: June 19. 1984
v-'
*JjJ~tat
Mary Lou Cl i fton
Secretary to Marvin E. Jones, ADLJ
-------
32
-------
33
-------
UNITED STATES ENVIRONMENTAL PPDTECTION AGENCY
BEFORE THE ADMINISTRATOR
IN RE
ROCKY MOUNTAIN PRESTRESS, INC.
and AERR.CO., INC.
Respondents
TSCAt PCB-83-017
INITIAL DECISION
CD
Toxic Substances Control Act - Determination of Liability - In
a situation where one contracts to have dust control oil applied
5"
on its premises, which was later determined to contain detectable
levels of PCBs, both the applicator and the property owner are
guilty of violating the Act, absent a showing that the property
owner had the oil analyzed prior to application.
Toxic Substances Control Act - Duty of the Agency - When a property
owner advises the Agency that it intends to hire a certain firm to
apply dust suppression oil to its premises and inquires of ".the EPA
as to whether or not it has any reason to doubt the reliability of
such firm, the Agency owes the regulated community the duty of
advising it of any dealings it may have had with such firm in the
past. The ultimate decision as to whether or not to use such firm
then rests with the property owner.
Toxic Substances Control Act - Penalty Determination - When two
respondents have violated a single count of a complaint, the court
must apportion the penalty determined to be appropriate between
them based upon their respective degrees of culpability considering
all of the facts surrounding the violation.
-------
4. Toxic Substances Control Act - Penalty Determination - In deter-
mining a Respondent's ability to pay a penalty, the court must
consider any published Agency penalty policy and, unless factors
are present which would argue against its application, should apply
such policy as written.
Appearances:
Gary E. Parish, Esquire
Denver, Colorado
For Respondent AERR.CO., Inc.
Gregory T. Hobbs Jr., Esquire
Zach C. Miller, Esquire
Davis, Graham and Stubbs
Denver, Colorado
For Respondent Rocky Mountain Prestress, Inc.
Kent B. Connally, Esquire
Daniel W. Hester, Esquire
U.S. Environmental Protection Agency
Denver, Colorado
For the Complainant
INITIAL DECISION
Preliminary Statement
This is a proceeding under § 16 (a) of the Toxic Substances Control
Act (15 U.S.C. 2615(a)), instituted by a complaint issued November 2,
1983 by the Director of the Enforcement Division, Region VIII, United
States Environmental Protection Agency (EPA), against Rocky Mountain
- 2 -
-------
Prestress, Inc. (hereinafter RMP), and AERR.CO., Inc. (hereinafter
AERR.CO.), the Respondents herein, for alleged violations of the Act and
regulations issued thereunder.l
Specifically, the complaint alleges that the Respondents violated
»
40 CFR § 761.20(d) by applying or causing to be applied dust suppressant
oil contaminated with PCBs. The complaint was issued November 2, 1983.
j*
The complaint proposed a civil penalty in the total amount of $25/000.00
for this violation. . .
. The answers filed by the Respondents admitted and denied various
aspects of the complaint 'as follows: both Respondents admitted that the
oil was applied on the property of RMP on the date and'manner alleged in
the complaint, but AERR.CO. denied that such oil contained any detectable
amounts of PCBs, and RMP denied (1) that they were liable under the Act
since they were not a "user of the contaminated oil as contemplated by
the regulations"; and (2) that even if such a violation were-found, they
were innocent of any violation because of the special situation surrounding
its deposition.
Section 16(a) of the Act provides, in part, as follows:
(a) Civil. - (1) Any person who violates a provision of
section 15 shall be liable to the United States for a civil
penalty in an amount not to exceed $25,000 for each such
violation. Each day such a violation continues shall, for
purposes of this subsection, constitute a separate violation
of section 15.
Section 15 of the Act (15 U.S.C. 2614) provides, in pertinent part, that
it- shall be unlawful for any person to "(1) fail or refuse to comply
with... (B) any requirement prescribed by section...6, or (C) any rule
promulgated under section...6" or to "(3) fail or refuse to (A) establish
or maintain records as required by this Act or a rule promulgated
thereunder."
- 3 -
-------
The parties sutmitted pre-hearing materials pursuant to § 22.19(e)
of the pertinent rules of practice. A hearing was held on April 25-26,
1984 in Denver, Colorado.
Following the hearing and the distribution of the transcript, the
parties filed initial and reply briefs, findings of fact and conclusions
of law, all of which have been carefully considered by the court in the
rendering of this decision.
Factual Background
Mr. Michael Bergin, an inspector of EPA, first visited the premises
of RMP on May 10, 1983. During that inspection, the plant manager
informed Mr. Bergin that the dirt roads in and around their facility
were going to be oiled soon pursuant to the requirements of their state
air pollution control permit which requires that the roads be treated
for dust suppression twice, a year. Mr. Bergin explained to the plant
manager that the regulations of the Agency prohibit the use of oil
containing any detectable levels of PCB for dust suppression purposes.
Expressing some concern about this revelation, the plant manager asked
Mr. Bergin whether or not EPA had any concern about the reputation of
AEER.CO. since that was the firm with whom they had contracted to apply
the oil. Mr. Bergin initially stated that he had inspected AERR.CO. and
was unaware of any specific information concerning that Company's prior
history but he would inquire on this subject of his colleagues at the
regional office and report back to the manager. Upon his return to the
regional office, Mr. Bergin, upon making an inquiry among his colleagues,
reported back to RMP that AERR.QD. had never been found in violation of
- 4 -
-------
the PCB regulations. Mr. Bergin suggested to RMP personnel that they
get written assurances from AERR.CO. that the waste oil to be used on
their roads contained no PCBs. It is alleged by Mr. Bergin that he
informed the general manager of RMP that the only sure way to avoid
liability under the PCB regulations was to have the waste oil to be
spread on the road analyzed for PCB content prior to oiling.
f
Upon being advised that RMP intended to oil their roads in the near
future, Agency personnel instructed Mr. Dorance to visit the premises
and take soil samples of the areas to be oiled so as to provide background
data to compare with post-oiling sample taking which the Agency intended to
accomplish. In furtherance to that direction, Mr. Dorance went to the
RMP premises on May 26, 1983 and upon being advised that the oiling had
not yet taken place but would occur on the upcoming weekend, weather
permitting, Mr. Dorance proceeded tc take samples from the roads that
were to be oiled. The oiling took place on May 28, 1983, and on June 2,
1983 Mr. Dorance returned to the RMP facility to take after-oiling
samples. Mr. Dorance gathered a split sample in the same location south
of the batch plant where he collected a previous sample and also took
photos of the area sampled.
The samples both before and after oiling were submitted to the EPA
laboratory for analysis and said analysis revealed PCB concentrations of
no greater than 5 ppra in either of the two pre-oiling samples. The oily
soil sample collected by Mr. Dorance on June 2nd following the oiling
showed PCB contamination level of an average of 37 ppm of Arochlor 1254.
No PCB concentrations were reported of Arochlor 1242 and 1260, although
some low levels of those two polymers of PCBs had been found in the
pre-oiling analysis.
- 5 -
-------
Upon being advised of the presence of PCBs following the oiling,
RMP contracted with several consultants for the purpose of: (1) conduct-
ing an extensive sample taking exercise of its own on the roads involved;
and (2) to test all of the other oil on its premises to make sure that
it was PCB-free. The results of these sampling programs showed that
there were, in fact, moderately high levels of PCBs throughout the oiled
roads of RMP's facilities and that no other source of PCB contaminated
oil is or was present on their property. The conclusion drawn from this
latter analysis was to conclusively show that the source of the PCBs
found on RMP's premises did not come from any oil which it may use or
have used in the course of its normal business processes.*
None of the parties in this matter had subjected the dust suppression
oil to laboratory analysis prior to its application on RMP's facilities.
There was testimony from AERR.CO. 's witnesses to the effect that prior
to the oiling tney had offered to have the oil tested by a reliable
laboratory if RMP was willing to pay the $25.00 laboratory fee. This
allegation was vehemently denied by RMP" witnesses who stated that the
only time any conversation was had concerning laboratory analysis of the
oil came up in conversations between AERR.
-------
oil to RMP's facility on the day of the oiling, there were printed: "Dust
control oil from selected use crankcase oil not containing any PCB
source material." RMP argues that, given the advice it received from
EPA to the effect that they had no past problems with AERR.OO. in regard
to PCBs and that they felt them to be a reliable and reputable supplier,
it felt that it had taken all reasonable precautions under the circumstances
by requiring AERR.CO. to certify that the oil they supplied was PCB-
free.
AERR. CO.' s position in the whole matter is that the oil that they
supplied to RMP's premises and which was subsequently applied by their
employees, in fact, contained no PCBs and that they, therefore, have no
culpability for the violation alleged in the complaint.
Discussion
My disposition of this matter requires that I first determine the
liability of the two Respondents and, secondly, assuming that both
parties are found to be culpable, to apportion the proposed civil penalty
among them based on their respective degrees of involvement. The penalty
allocation exercise is required since the complaint only assesses one
civil penalty and makes no attempt to apportion such penalty between the
two Respondents. The post-hearing briefs of both the EPA and RMP did,
however, address this question of. apportionment in some detail.
As indicated above, RMP's defense to the complaint was two-fold.
The first one being that they are not liable for any violation since
they did not "use" the contaminated oil as that term is used in the
regulations. The regulation applicable to this situation is found at
40 CFR § 761.20(d) which states:
- '7 -
-------
"The use of waste oil that contains any detectable con-
centration of PCB as a sealant, coating, or dust control
agent is prohibited. Prohibited uses include but are not
limited to, road oiling, general dust control...11
In support of its argument that the language of the regulation is
not applicable to it, RMP provides certain definitions of the word use
and attempts to conclude that they did not use the contaminated oil but
merely had it applied to their presrtises by a culpable applicator and
they were merely an innocent third party. EPA counters this argument
with a broader definition of the word use and users such as that found
in Black's Law Dictionary which includes within its purview one who
enjoys a benefit frcm such use. Clearly RMP enjoyed a benefit from the
application of the PCB contaminated oil to its premises in that it was
required to utilize some form of dust control technology under the terms
of their state issued air pollution control permit and elected to use
oil for this function. Clearly they benefitted frcm this application
and, of course, were the persons who ordered the oil to be applied.
This argument, although academically intriguing, can not be allowed to
stand since its acceptance by the court would be contrary to the express
purposes of the statutes and regulations promulgated thereunder. To
allow this argument to stand would permit a person to cause contaminated
oil to be applied to its premises by a third party and then appear later
and say they have no responsibility for the irresponsible acts of others.
Since one of the purposes of the Act and the regulations is to prevent
the introduction of PCBs to the environment, the interpretation suggested
by Respondent RMP would be contrary to that purpose and, therefore,
be unacceptable. I am, therefore, of the opinion that RMP did, in fact,
violate the terms of the above-cited regulation when they contracted
with AERR.CO. to apply the oil to their property.
- 8 -
-------
Having determined that RMP is guilty of a technical violation of
the Act and the regulations promulgated pursuant thereto, I must now
address their degree of culpability in this matter. As discussed above,
RMP officials when being advised of the absolute prohibition against the
»
application of any PCB contaminated oil for the purposes of dust suppres-
sion inquired of EPA agents as to whether or not it had any cause to be .
concerned about the reputation or liability of AERR.OO. particularly in
the area of PCBs. The advice that they ultimately, received from EPA was
that their records revealed that AERR.CO. had not been found guilty of
any prior PCB violations; This advice, although technically true,
was for all practicable purposes, inaccurate and misleading, since the
record reveals that the Agency had, in fact, on a.prior occasion attempted
to prosecute AERR.CO. for a PCB violation, which prosecution was subsequently
withdrawn for reasons unrelated to this decision. It, therefore, turns
out to be the case that the EPA did, in fact, have sane reason to believe
that AERR.CO. was not the most reliable supplier of oil in the area. By
failing to advise RMP of this fact, it lulled them into a sense of
false security and as a result thereof RMP did not seek the services of
another oil supplier, which they could have easily done, or gone to the
expense of having the oil tested prior to its application. Rather they
relied upon the advice given to them by the EPA inspector to the effect
that it would be a good idea to obtain sane sort of quarantee from
AERR.CO. that the oil they supplied was PCB free. RMP did request, and
obtain such guarantee from AERR.CO.
At the trial, and in their post-hearing briefs, EPA points out that
RMP was negligent in not having the oil subjected to laboratory analysis
prior to' its application. RMP counters this argument with the observation
Q _
-------
that since EPA is in the business of protecting the environment that
perhaps it was derelict in not having the oil tested itself. EPA's
position on this point is that: (1) they do not have the wherewithall
nor the obligation to test all of the thousands of oil suppliers located
* t
within its Region; and (2) that in any event it is the ultimate responsi- . .
bility of the user of the oil to see that it is contamination free. EPA
also points out that under-the regulations generally applicable to PCB
matters there is a J50 ppm limitation below which the Agency has no
authority. Although EPA is correct in its observation that it has no
obligation nor facilities or resources to test the oil in its geographical
jurisdiction, under the circumstances of this case, a good argument
could be made that EPA, knowing that the oil was to be used for road
application purposes, a use that has no 50 ppm limitation, should have
tested the oil themselves. Under the circumstances of this case, I need
not decide who among the parties to this proceeding were the most derelict
in their duty in not having the oil subjected to laboratory analysis
since such determination is not crucial to my ultimate decision.
In this regard, I am of the opinion that RMP acted reasonably under
the circumstances and their failure to have the oil subjected to laboratory
analysis prior to its application was not negligent, given EFA's statements
as to the reliability of the supplier and the fact that they did, in
fact, obtain a guarantee of PCB-free oil. In this regard it should be
noted that the record reveals that RMP has used AERR.CO. in the past as
t
i
a supplier of dust suppression oil without any apparent repercussions.
Section 16 of the Act which has to do with the assessment of civil
penalties in these matters, requires that the Agency consider, among
other things, prior violations of the Respondent, degree of culpability,
- 10 -
-------
and other matters as justice may require. In evaluating Respondent RMP's
degree of culpability in this matter, it should be noted that they have
agreed to clean up the facility and transport all of the contaminated
soil to an approved disposal site at a cost of approximately $350,000.00.
The record also reveals that the Respondent RMP has expended in excess
of an additional $50,000.00 for sample taking and analysis, and consultant.
fees (exclusive of attorney fees). Considering all of these facts and
applying the statutory mandate of consideration of "such other matters
as justice may require", I am of the opinion that RMP's degree of
culpability in this matter is relatively small.
To the extent the record reflects a posture of cooperativeness and
responsbility on the part of RMP, the record reflects the opposite in
the case of AERR.CO. My reading of the record reflects that AERR.CO.
has consistently refused to share any of the costs of the subsequent
investigation undertaken by RMP and its consultants or to contribute in
any way to the costs of the clean-up, discussed above. AERR.CO. 's
position in this matter is that they have no liability whatsoever since
the evidence shows (at least in their view) that the oil which they
delivered to RMP's facility was PCB-free. The post-hearing brief of
AERR.CO. rests its defense in this regard entirely upon its analysis of
the results of the sampling protocol accomplished by EPA and RMP. As
discussed above, the initial sampling done prior to the oiling revealed
the presence of low levels of certain Arochlors of PCBs. Arochlor is a
trade name utilized by Monsanto Company, one of the primary producers of
PCBs and the numbers follwing the designation Arochlor, such as 1242,
1260, and 1250, merely reflect the number of chlorine molecules that are
-'11 -
-------
bound in the ultimate product. In its post-hearing brief/ counsel for
AERR.CO. engages in a rather imaginative and intriguing analysis of all
of the sampling done on the subject premises and takes the position that
since certain Arochlors were found at the first sampling which were not
found in the more extensive subsequent samplings, demonstrate that all
of the PCBs ultimately'discovered on RMP's facilities were there prior
t
to the May 28th oiling. They argue''that since higher concentrations of
certain Arochlor isomers were found at depth and, in seme instances,
higher concentrations at the surface that, for the most part, certain of
the isomers were found in. some portions of the property and not in
others, and that this confusing array of data clearly demonstrates that
the dust suppression oil applied by AERR.CO. on May 28th contained
absolutely no PCBs.
Although this argument is certainly intriguing, it ignores the
testimony of Mr." Topolski, the only identifiable PCB expert to appear
and testify at the hearing. Mr. Topolski, who was the president of one
\
of the consulting firms hired by RMP, has an impressive array of credentials
in the area of PCB chemistry, analysis, control and disposition. It was
Mr. Topolski's uncontroverted testimony that the PCBs found on the
premises of RMP were the result of a single application and that that
application was the one done by AERR.CO. on May 28th. Mr. Topolski, after
explaining in some detail how PCB oil is manufactured, testified that
the variety of results shown by the sampling protocols and the laboratory .
analysis, thereof, are consistent with his understanding of the behavior
of PCBs in the environment. For one thing, he explains the absence of
the laboratory discovery of certain PCB Arochlors in the subsequent
-'12 -
-------
samplings by his explanation that in serve cases a higher concentration
of certain PCB Arochlors will mask the presence of other Arochlors which
are present in smaller concentrations and that sijnply because one only
finds a particular Arochlor, upon laboratory analysis, does not necessarily
mean that the other forms of Arochlors were not, likewise, present. He
also explains that the different concentrations of PCBs found at different
depths throughout the Respondent' s ^premises are explained by the difference
in the matrix of the soils upon which the PCB oil was applied, the
effect of sunlight and other chemicals that might be present in the
soil. . .
As we discussed above, none of the parties to this proceeding
performed any laboratory analysis on the oil at any time prior to its
application. The record does reveal, however, that the tank in which
AERR.CO. stored the oil which it ultimately applied to the premises of
RMP, did contain PCB contaminated sludge. One of the employees of
AERR.CO. testified that the tank in question was accidently punctured by
one of its employees with a forklift while practicing the use of that
device and that the tank was subseqently cut up for scrap. The whereabouts
of its component parts is unknown to AERR.CO. officers. Given the
nature of PCBs, that is, that they do not degrade in the environment .but
are, on the contrary, extremely persistent, leads one to the conclusion .
that the oil applied by AERR.CO. was most likely contaminated with PCBs
and, despite counsel's ingenious arguments to the contrary concerning
the results of the analysis of the samples obtained from the RMP premises,
I am of the opinion that the oil which AERR.CO. applied did, in fact,
-13 -
-------
in detectable limits of FCBs. It necessarily follows that AERR.CO.,
likewise, violated the provisions of the Act and the regulations by
applying PCB contaminated oil to the premises of RMP.
Having determined that both of the Respondents violated the Act and
the applicable regulation, I must now determine whether or not the
penalty proposed by the Complainant is appropriate and, if so, how that
penalty should be allocated between the two Respondents.
Penalty Assessment and Allocation
In the pre-hearing exchange directed by the court, EPA was required
to explain in some detail how it calculated the proposed penalty as
found in the corplaint. Their response indicated that the penalty was
calculated in accordance with theTCB penalty policy found in 45 F.R.
59776. The use of this penalty policy in these matters is recognized
both by the pertinent regulations and has been cited with approval by
the undersigned and all of his colleagues in similar cases. EPA's
witness at the hearing on the question of penalty calculation was Mr. J.
William Geise, who is the chief of the Toxic Substances Branch of Region
VIII, EPA. After explaining that he used the above-mentioned penalty
policy in calculating the proposed penalty in this case, Mr. Geise went
on to describe how the penalty policy is structured and how he applied
the various elements of the penalty policy to the facts of this case in
arriving at the penalty set forth in the complaint. What the penalty
policy does is take the various elements set forth in the statute,
which the Administrator must consider in arriving at a penalty in these
cases, and discusses them separately and in some detail. The policy
- 14 -
-------
contains a table which has in it a matrix of suggested penalties ranging
from $200.00 to $25,000.00, the statutory maximum. The matrix has on
one axis, an array of columns to measure the extent of potential damage
under the categories "major", "significant", and "minor". On the other
axis, there is a description of circumstances surrounding a violation
(probability of damages). This axis is divided into three categories:
high range, mid-range, and low range, which are further subdivided into
two levels. Therefore, the matrix presents six levels of probability of
damage on one axis and three levels of extent of potential damage on the
other.
Mr. Geise placed the "probability of damage" in the- high range and
major category based on the language of the policy which states that
"the Agency chose to prohibit these areas whenever detectable levels of
PCB were present, because any such use of PCB is likely to result in
widespread environmental and health damage." The witness said that
since that language suggests to him that the discharge of PCB contaminated
oil for road oiling purposes would result in widespread health and
environmental problems, that that was similar to the type of penalty
that the policy discussed under the "improper disposal" category of
PCBs. Having determined the appropriate place on the two axis of the
matrix which are appropriate to this matter, reference to the policy
shows that the appropriate penalty for this violation would be $25,000.00.
I have no argument with the Agency's penalty assessment in this case and
ray reading of the briefs of the parties indicates that Respondent, PMP,
does not either, but they say that they are not responsible for any of
it. On on the other hand, AERR.CO. says they do not have much of an
argument .with it either except that by reference to that same penalty
- 15 -
-------
s
policy their liability can not exceed four per cent of the average of
their last four years gross sales which results in a substantially
smaller number than $25,000.00. Having determined that $25,000.00 is an
appropriate penalty to be assessed in this case, I must now make a
determination as to how to equitably apportion that number between the tvro
Respondents.
Under the circumstances, I am of the opinion that, although PMP is
guilty of violating the above-cited regulation, its culpability in this
matter is extremely small given the steps it took to assure that the oil
to be applied was PCB-free and, just as importantly, its cooperative
attitude in assuring that the contaminated soil will be 'cleaned up and
removed at a cost of approximately $350,000.00, in addition to the more
than $50,000.00 that RMP was forced to expend in hiring consultants and
running its own tests on the premises, all of which demonstrated a
position of cooperation and corporate responsibility. I am, therefore,
of the opinion that the $25,000.00 should be allocated on the following
basis: 80 per cent to AERR.CO., and 20 per cent to RMP. I further am
of the opinion that the $5,000.00 penalty allocated to RMP should,
in this case, be reduced to $-0- on the condition that within sixty (60)
days from the date of this decision RMP has cleaned up the premises and
removed the contaminated materials to an authorized site and that such
fact has been certified to the Agency.
Having determined that, under the circumstances of this case,
AERR.QO. should be assessed a penalty of $20,000.00, I must now address
AERR.CO. 's argument that even if they are found to be liable for some
penalty, it can not exceed 4 per cent of the last four-year average of
gross sales, which in this case turns out to be $8,990.00.
- 16 -
-------
Section 16 of the Act requires that in assessing a civil penalty,
the Administrator must consider the following:
"In determining the amount of a civil penalty, the
Administrator shall take into account the nature,
circumstances, extent, and gravity of the violation or
violations and, with respect to the violator, ability to
pay, effect on ability to continue to do business, and
history of prior violations, the degree of culpability, and
such other matters as justice may require." (Brphasis
supplied.)
The regulations which establish the rules of procedure in these
cases found at 40 CFR 22 states in § 22.27(b) that:
"If the presiding officer determines that a violation
has occurred, the presiding officer shall determine the
dollar amount of the reconmended civil penalty to be assessed
in the initial decision in accordance with any criteria
set forth in the Act relating to the proper amount of a civil
penalty, and must consider any civil penalty guidelines issued
under the Act. If the presiding officer decides to assess a
penalty different than the amount from.the penalty recommended
to be assessed in the complaint, the presiding officer shall set
forth in the initial decision the specific reasons for the
increase or decrease."
During the course of the hearing in this matter, counsel for AERR.OO.,
revealed that his client has a. serious problem as to its ability to pay
a penalty under the Act and the penalty policy. This disclosure came as
a relative surprise to the court and the other parties since the usual
practice is that if a Respondent in these matters wishes to contest the
amount of the penalty based on its inability to pay, such defense must
be raised in its answer. No such defense was set forth in AERR.OO. 's
answer to the complaint and, thus, neither the court nor the other
parties were aware that this defense would be forthcoming until the
middle of the trial. When this procedure was made known to counsel for
AERR.CO., he agreed to provide the other parties and the court with
certain financial documents, such asincome tax returns and financial
statementsas proof of his client rs inability to pay the proposed
- 17 -
-------
penalty. Pursuant to a post-hearing order issued by the court, Respondent,
AERR.CO. provided copies of its income tax returns and other financial
data for the years 1980 through 1983 and, although counsel for the
Complainant objected that these returns were not signed and therefore
unreliable, I have no reason to suspect that counsel would provide false
documentation to a Federal agency, an act which is associated with
substantial criminal sanctions. The documentation provided by AERR.CO.
reveals that the gross sales of that Company were as follows: 1980 '-
$163,617.00; 1981 - ?313,973.00; 1982 - $212,000.00; 1983 - $209,405.00.
These figures total $898,995.00, giving an average of $224,749.00,
which when multiplied by 4 per cent results in a figure .of $8,990.00.
Referring to the above-mentioned penalty policy, one finds that in
assessing a Respondent's ability to pay and ability to continue in
business as used in the statute, it is believed that a year's net income
as determined by a fixed percentage of total sales will generally yield
an amount which the firm can afford to pay. The policy goes on to state
that: "the average ratio of net incomfe to sales level for U.S. manufactur-
ing in the past five years is approximately 5 per cent. Since small
firms are generally slightly less profitable than average size firms,
and since small firms are the ones most likely to have difficulty in
paying TSCA penalties, the guideline is reduced to 4 per cent." The
penalty policy then goes on to say that for purposes of calculating the
ability to pay, figures for the current year and the prior three years
should be averaged. Four per cent of the average sales will serve as
the guideline for what the ccnpany has the ability to pay.
-'18 -
-------
The testimony of AERR.OO. 's officers .and employees indicate that
over the past several years the Company has consistently lost money,
and as counsel for AERR.CO. states in his brief even the $8.990.00,
as calculated by the penalty policy, would be practicably impossible for
o
this Respondent to pay, given its continuing negative cash flow.
Although the court is not absolutely bound by any published penalty
_<.
policy of the Agency in assessing ah appropriate penalty in these cases,
should the court deviate from the terms thereof it .must explain the
reasons for such differences. In this particular case, I am unable to
establish a creditable argument for increasing the assessed penalty
against AERR.CO. given the clear language of the penalty" policy and the
absence of any other factors which would argue against its application
in this case. Unlike most of the numbers suggested by this penalty
policy, which involve a great deal of subjective evaluation, the "ability
to pay" portion of the policy is totally objective in that it requires
only the application of arithmetic to arrive at a given figure. Since I
have no reason to suspect the figures provided by AERR.CO. in response
to the court's post-hearing order and the clear, unequivocable language
of the penalty policy applicable to these proceedings, I must reduce the
assessed penalty applicable to AERR.CO. from $20,000.00 to $8,990.00,
based on its inability to pay.
In making this determination, I must observe that it is unfortunate
that a Company possessing such meager funds is able to cause the potential
for such widespread environmental damage, and in the course of doing so,
has caused a relatively innocent party to expend in excess of $400,000.00
to- clean up the mess made by the more culpable and apparently more
irresponsible party.
- 19 -
-------
In arriving at this conclusion, I have carefully considered the
entire record in this case, consisting of the transcript, the exhibits
and the briefs of all the parties. All contentions of the parties
presented for the record have been considered, and whether or not specifi-
cally mentioned hereinj any suggestions, requests, etc., inconsistent
with this initial decision are denied.
ORDER2
Pursuant to § 16 (a) of the Toxic Substances Control Act (15 USC
2615(a)), a civil penalty of $8,990.00 is hereby assessed against
Respondent, AERR.OO., Inc., for the violation of the Act found herein.
Pursuant to § 16 (a) of the Toxic Substances Control Act (15 USC
2615(a)), a civil penalty of $5,000.00 is hereby assessed against
Respondent, Rocky Mountain Prestress, Inc., which penalty shall be
reduced to $-0- contingent upon Rocky Mountain Prestress, Inc. cleaning
up the subject site and removing the contaninated material to an approved
disposal site in accordance with an approved procedure agreed to by the
Complainant. Such clean up and disposal mast be accomplished within 60
days of the date of this Order and certified to by the Complainant.
Failure to accomplish such clean up and disposal shall result in the
assessment of the full $5,000.00 penalty herein established against said
Respondent.
2Unless an appeal is taken pursuant to § 22.30 of the interim rules of
practice, or the Administrator elects to review this decision on his own
motion, the Initial Decision shall become the final order of the Administrator,
(See § 22'.27(c)).
- 20 -
-------
Payment of the full amount of the civil penalties assessed shall be
made within sixty (60) days of service of the final Order upon Respondent/
AERR.CO., Inc., by forwarding to the Regional Hearing Clerk a cashiers'
check or certified check payable to the United States of America.
Should Respondent, Rocky Mountain Prestress, Inc., fail to comply
with the conditions set forth here^in within the time periods established,
v t
payment in the full amount of the assessment against said Respondent
shall be paid in a like manner.
Thomas B. Yost /
Administrative ^aw Judge
DATED: August 23, 1984
-------
34
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
s
In the Matter of J "P.
)
Suburban Station,. ) Docket No. TSCA-III-40
Respondent )
1. Toxic Substances Control Act - PCB - In cleaning up PCBs disposed of
prior to February 17, 1978, each container of waste generated during
the clean-up is "removed from service" when it is filled, and if
stored for more than 30-days after it is filled must be stored in a
facility that complies with 761.65(b).
2. Toxic Substances Control Act - PCB - The owner of Suburban Station,
Southeastern Pennsylvania Transporation Authority (SEPTA), which
licensed the City of Philadelphia to make improvements in the Station
as part of a project being constructed by the City, held not jointly
and severally liable with the City for storage violations occuring
during a clean-up of PCBs where the clean-up had been performed under
the direction and control of the City and SEPTA was not involved in
the clean-up. -
3. Toxic Substances Control Act - PCB - The failure to provide proper con-
tainment for containers of PCBs generated during a clean-up which took
ten months, while the containers were stored at the clean-up site,
assessed a penalty as one single violation. Complainant's claim that
the penalty should be assessed as three separate violations rejected
because under the penalty guidelines multiple penalties are discretionary
and Complainant had not shown that the single penalty was not an
appropriate penalty.
Appearances:
Margaret M. Cardamone, United States Environmental
Protection Agency, Region III, Philadelphia, PA,
for Complainant.
Vincent J. Walsh, Jr., Southeastern Pennsylvania
Transportation Authority, Philadelphia, PA,
for Respondent.
William J. McManus, Assistant City Solicitor, City
of Philadelphia, PA, for Respondent.
-------
INITIAL DECISION
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
section 16(a), 15 U.S.C. 2615(a), to assess civil penalties for violation
of a rule promulgated.under section 6(e) of the Act, 15 U.S.C. 2605(e),
regulating the manufacture, processing, distribution in commerce, use,
/
disposal, storage and marking of pfrlychlorinated biphenyls ("PCB Ban
Rule"), 40 C.F.R. Part 761. !_/ The administrative complaint issued by
EPA Region III, charged that Respondents Southeastern Pennsylvania Trans-
portation Authority, the City of Philadelphia and Penn Central Corporation
improperly stored PCBs removed during a PCB cleanup at Suburban Station.
A penalty of $45,000 was requested.
Penn Central Corporation on fts unopposed motion was dismissed as a
party to the proceeding. Respondents the City of Philadelphia and South-
eastern Pennslyvania Transportation Authority answered, contes-ting both
the violation and the appropriateness of the proposed penalty.
A hearing was held in Philadelphia, PA on April 3, 1984. Thereafter
each party submitted proposed findings of fact, conclusions of law and a
_i :
proposed order with a supporting brief. On consideration of the entire
record and the submissions of the parties, a penalty of $15,000 is
assessed against Respondent the City of Philadelphia. The complaint is
dismissed against Respondent Southeastern Pennsylvania Transportation
I/ Section 16(a) provides in pertinent part as follows: "(1) Any person
who violates a provision of section 15 shall be liable to the United States
for a civil penalty in an amount not to exceed $25,000 for each such
violation. Each day such violation continues shall, for the purposes of
this subsection, constitute a separate violation of section 15."
TSCA, section 15, makes it unlawful among other acts, for any person to
"(1) fail or refuse to comply with . . . (c) any rule promulgated . . .
under section ... 6."
-------
Authority. The findings, conclusions and reasons for the assessment of
this penalty follow. All proposed findings and conclusions inconsistent
with this decision are rejected.
Findings of Fact
1. Respondent Southeastern Pennsylvania Transportation Authority ("SEPTA")
is a transportation authority-authorized under Article III of the
Pennsylvania Urban Mass Transportation Law, 55 P.S. Sec. 600-301,
et. seq. SEPTA is the owner of Suburban Station located at 16th Street
and John F. Kennedy Boulevard, Philadelphia, Pennsylvania. SEPTA has
operated commuter rail services into Suburban Station since January 1,
1983. Stipulation of the parties, Transcript ("Tr.") 2.
2. Respondent, the City of Philadelphia ("City"), is a city of the first
class located in the Commonwealth of Pennsylvania. The City under
a grant from the U.S. Urban Mass Transportation Administration is
constructing a project known as the Center City Commuter Connection.
This work involved major construction in and the renovation of
Suburban Station. Tr. 136; Stipulation, Tr. 3.
3. The City discovered that the track bed and adjacent areas in Suburban "
Station where the construction and renovation work would be done were
extensively contaminated with PCBs, apparently as a result of PCBs
having leaked from train transformers onto the track beds over a
period of many years. Samples taken from various locations in the
work site showed concentrations of PCBs ranging from 720 ppm to
530,000 ppm. Complainant's Exh. 5; Complainant's Exh. 6, p. 1;
Complainant's Exh. 8, Attach. A.
4. In March 1982, at the City's request, representatives of the EPA met
with representatives of the City to discuss decontaminating Suburban
Station of PCBs. Tr. 7-9, 35.
-------
5. At the meeting, the City was told that once the PCB contamination
was disturbed the PCBs would have to be stored, marked and disposed
of in accordance with the PCB regulations. A copy of the PCB regula-
tions was given to the City. Tr. 8-9.
s
6. On August 24, 1982, the EPA met with the City to again discuss the
decontamination of Suburban Station. One item discussed was the
storage of the cleaned-up PCBs until they were disposed of. The
EPA told the City that under the PCB regulations the temporary
storage of PCBs without curbing could not exceed 30 days. 2/ Tr. 18,
72-73.
7. As a follow-up to the August 24th meeting, EPA representatives,
Christopher Pilla, Edward Cohen and Roland Shrecongost, on September 9,
1982, made an inspection of Suburban Station. The inspection had been
arranged with Thomas Burns, the City's resident engineer for the
Suburban Station renovations, who was present at the inspection. Tr. 19,
97, 107.
8. Mr. Pilla on the''September 9 inspection saw a number of drums of PCB
waste material stored on the platforms in areas'which were not curbed.
He told Mr. Burns that the regulation required that drums stored for more
than 30-days must be stored in a curbed area. He also suggested that as
an alternative to curbing the City could use metal catchpans for contain-
ment. Tr. 20, 43-44, 77, 103.
21 See the storage for disposal requirements, 40 C.F.R. 761.65, which in
-The testimony is referred to under its former numbering, 40 C.F.R. 761.42.
Effective May 6, 1982, the PCB Ban Rule was renumbered without any substantive
changes. 47 Fed. Reg. 19526 (May 6, 1982). References in this opinion will
be to the present numbering.
-------
9. On October 26, 1982, the City wrote to the EPA about its.progress in
the PCB cleanup at Suburban Station. With respect to the drums of
PCB waste, the City stated as follows:
Approximately 450 drums containing PCB waste were generated
by the clean-up. . . . [T]hese drums will be expeditiously
removed from the Station/ and transported to SCA Services'
hazardous waste facility in Model City, New York for final
disposal. Our analysis has determined that all the waste can
be considered solid for purposes of disposal.
Complainant's Exh. 7, Attach. 4.
t
10. On February 28, 1983, the EPA received a complaint from a private
citizen that drums of PCBs were located on a publicly accessible train
platform at Suburban Station (Tr. 22, 39, 53; Complainant's Exh. 7, p. 1),
11. Mr. Pilla called Mr. Burns and arranged to inspect Suburban Station on
March 1, 1983. On that day, Mr. Pilla saw about 200 drums of PCB
material on platform No. 3. The area was not curbed and ..the drums were
not contained in metal catchpans. Tr. 23, 32; Complainant's Exh. 7,
p. 2. .
12. At the March 1st inspection Mr. Pilla was handed a letter from the City
dated March 1, 1983, stating that 500 drums of PCB solid waste and
construction debris had been generated by the cleanup of the Station and
were being assembled for transportation to an approved PCB landfill. It
was further stated that the drums were scheduled to be removed from the
Station over the weekend of March 12-13. Tr. 29-30; Complainant's
Exh. 7, Attach. 3.
13. Mr. Pilla inspected Suburban Station again on March 13, 1983. All
drums of PCB waste had been removed from the Station. He also in-
-------
5
spected the underplatform areas where the drums had been stored.
None of these storage areas had any curbing nor was there evidence
of any metal catchpans having been used. Tr. 31, 56; Complainant's
Exh. 7, p. 2.
14. The approximately 500 drums of PCB contaminated material collected
during the Suburban Station cleanup were filled between May 1932 and'
February 1983 (Tr. 43, 98-100).
15. SEPTA as owner of .Suburban Station granted to the City a license to
come upon the Station property to do the construction and renovation
work for the Center City Commuter Connection project. It was the City
however, which obtained the federal grant to fund the project and
contracted for the work to carry it out including the clean-up of PCBs
at Suburban Station. The City selected and engaged the services of the
contractor to do the PCB clean-up and decided what the work would include.
Tr. 103, 109, 133, 136-37; Stipulation, Tr. 2-3; Complainant's Exh. 8.
Discussion and Conclusions
The specific, storage violations charged in the complaint were that drums
of PCB waste material designated for disposal had been stored in facilities
which did not have proper curbing, and which were below the 100-year flood
water elevation. The charge that the PCB drums were stored below the 100-year
flood water elevation, however, was withdrawn at the beginning of the hearing. 3_/
Consequently the only violation remaining to be considered is whether there was
a violation of the requirement that the drums should have been stored in
facilities having continuous curbing at least six inches high.
3/ Tr. 3-4.
-------
See 40 C.F.R. 761.65(b)(l)(ii). The record also disclosed that in lieu of
continous curbing, the EPA would have accepted the use of metal catchpans
as an alternative means of providing containment. 4/ It Is not disputed
that the PCB drums were not stored either in a facility with continuous
curbing or on metal catchpans.
The EPA's position with respect to the violation is straightforward.
There was no obligation to clean up the PCBs on the track beds and adjacent
areas since they were "historical" PCBs, i.e., had been in place prior to
February 17, 1978, the date of publication of the original PCB Disposal and
Marking Rule. 5/ Each container of PCBs resulting from the clean up, however,
and stored for disposal, according to 40 C.F.R. 761.60(a)(6) and (c)(3), must
be stored in a facility that complies with 761.65(b), unless it is "temporarily"
stored for no more than 30 days from the date of its removal from service.
The City's position appears to be that the governing date for the storage
requirements is when the clean-up was completed and all the PCB filled drums
were removed from the decontamination site for a shipment to a disposal site.
It relies upon a note'-placed as a preamble to the storage and disposal regu-
lations under Subpart D which reads in pertinent part as follows:
NOTE: This Subpart [D] does not require removal
of PCBs and PCB Items from service and dis-
posal earlier than would normally be the case.
However, when PCBs and PCB Items are removed
from service and disposed of, disposal must be
undertaken in accordance with these regulations.
PCBs (including "soils and debris) and PCB Items
.4/ Findings of Fact No. 9, supra.
5/ See 43 Fed. Reg. 7150. The disposal and marking requirements were
subsequently incorporated into the final PCB Ban Rule. See 44 Fed. Reg.
31514 (May 31, 1979).
-------
which have been placed in a disposal site are.
considered to be "in service" for purposes of
the applicability of this subpart. This sub-
part does not require PCBs and PCB Items land-
filled, prior to February 17, 1978 to be removed
for disposal. However, if such PCBs or PCB
Items are removed from the disposal site, they
must be disposed of in accordance with this
subpart. * * *
The City argues that the decontamination site at Suburban Station is
a "disposal site" under the definition of "disposal" in the PCB Ban Rule
(40 C.F.R. 761.3(b)). Accordingly, the City claims that as long as the
PCB filled drums remained on the decontamination site they were considered
to be in service and not subject to the storage for disposal requirements.
Such an interpretation rests upon reading considerably more into the note
than is justified by its wording.
For purposes of this decision it can be assumed that the decontami-
nation site is a "disposal site" within the meaning of the note. The
language in the note referring to the removal of PCBs "from service",
however, can also refer to the cleaning up of the PCBs by scraping, de-
greasing, washing, etc. from the surfaces where they had been deposited. 6/
In fact, this would be the most obvious way to read the note. It would seem
that PCBs are usually placed in a disposal site to be permanently disposed
"of there. Under the note, then, they would be considered to remain in
service as long as they were undisturbed. In any event, the lack of merit
in the City's argument is demonstrated by the fact that under the City's
6/ The parties themselves characterize the cleaning up of the PCBs as
the removal of PCBs. See Complainant's Exh. 7, Attachment 2, where the
Oity in writing to the EPA in October 1982, says, "[the contractor] has
recently successfully completed its clean-up efforts at the Station. In
the areas that were cleaned, 95-99 percent of the PCBs that were present
have been removed." The "removal" referred to was obviously to the clean-
up of the PCB material itself and not to the shipment of the drums, since
the drums were still being stored at the station.
-------
8
interpretation the PCB drums could have been stored indefinitely at the
site, which would have been tantamount to permitting their disposal at
other than at an EPA approved facility. The City, however, never questioned
that the drums had to be eventually disposed of at an EPA approved facility. TJ
I find, accordingly, that the. storage requirements became applicable once
the PCBs were removed by scraping, degreasing, washing, etc. from the surfaces
where they lay. &/
Section 761.65(c)(l) of the regulations, however, permits the temporary
storage of certain PCB items for up to 30 days without complying with the
storage requirements, provided that there is attached to the item a notation
indicating the date it was removed from service. The pertinent language is
as follows:
(c)(l) The following PCB Items may be
stored temporarily in an area that does
not comply with the requirements of
paragraph (b) of this section for up to
thirty days from the date of their re-
moval from service, provided that a
notation is attached to the PCB Item or
a PCB Container (containing the item)
indicating the date the item was removed
from service:
(i) Non-leaking PCB Articles and PCB
Equipment; '
(ii) Leaking PCB Articles and PCB
Equipment if the PCB Items are placed in
a non-leaking PCB Container that contains-
sufficient sorbent materials to absorb any
liquid PCBs remaining in the PCB Items;
TJ Although the City first considered entombment of the PCBs at a specially
constructed facility at the Station, it finally decided against this,
apparently because of the difficulty of obtaining EPA approval of the pro-
cedure. Tr.-71-72.
8/ The clearest application of the note would be to the obligation to re-
cfispose of PCBs which had been disposed of prior to the publication of the
PCB regulations. A study of the legislative history of the note indicates
that the language of the note relied on by the City had its origin in just
such a situation. See 43 Fed. Reg. -33918-919 (August 2, 1978).
-------
(iii) PCB Containers containing non-
liquid PCBs such as contaminated soil,
rags, and debris; and
(iv) PCB Containers containing liquid
PCBs at a concentration between 50 and
500 ppm, provided a Spill Prevention,
Control and Countermeasure Plan has been
prepared fw the temporary storage area in
accordance*with 40 CFR Part 112. In
addition, each container must bear a
notation that indicates that the liquid in
the drum do not exceed 500 ppm PCB.
It is to be noted that the temporary storage permitted is for the
PCB containers filled with the PCB material rather than for the material
itself. It is assumed, however, or at least no one has argued to the
contrary, that in cleaning up PCBs, the PCB material, as part of the
clean-up, can be put into containers with the containers then becoming
subject to the 30-day temporary storage rule.
SEPTA argues that the regulation in speaking of removal from service
uses terms appropriate to a group of containers, i.e., "their removal from
service", and that, therefore, it was intended that where a number of con-
tainers are filled in a clean-up which continues over a period of time, the..
30-day storage period starts to run from the date the last container is
filled. Under this construction there would have been no violation since.
the containers were shipped for disposal within 30-days after the last
container was filled. The logical reading, however, is that the plural
"their" in the phase "their removal from service" simply refers generally
to the several different kinds of PCB items, PCB containers being only one
such item, for which temporary storage is permitted, and that that particular
provision was not intended to deal with determining the date on which any
particular item was removed from service.
-------
10
SEPTA'S interpretation is also questionable because the result of
permitting the storage of containers in a substandard storage area for 8
to 10 months, seems totally inconsistent with the entire thrust of the regu-
lation which is to limit temporary storage to 30-days. This is even more
apparent when one examines the legislative history of the regulation.
The original marking and disposal rule permitted the temporary storage
only of PCB articles and equipment if they were non-leaking or in non-
leaking containers. _9/ PCB articles and equipment are manufactured items
other than containers such as transformers, or capacitors or electric
equipment. IP/ When the PCB Ban Rule was issued, the regulation was amended
to permit the temporary storage of PCB containers of non-liquid wastes and
of liquids with low concentrations (50-500 ppm) of PCBS. With respect to
containers of non-liquid wastes, it was explained that their temporary storage
was permitted because such containers do not pose any greater hazard than
non-leaking containers of leaking articles, ll/ With an article like a
i
transformer or capacitor there would usually be no question of the date when
it is removed from service, the word service being given its normal meaning"
of being in-use. This appears to be the meaning that "service" also has
in the phrase "in service" in the preamble to Subpart D. It is obvious,
9/ Marking and disposal rule, section 761,42(c)(l), 43 Fed. Reg. 7162
TFebruary 17, 1978), as amended by 43 Fed. Reg'. 33198 (August 2, 1978).
Section 761.42 along with the other provisions of the marking and disposal
rule was incorporated with modifications and amendments into the PCB Ban
Rule. Supra, n 5. Section 761.42 was redesignated 761.65 at 47 Fed. Reg.
19527 (1982).
10/ Marking and disposal rule, sections 761.2(r),(v), 43 Fed. Reg. at
7T57. These definitions are now found in 761.3(t), (w).
Vl/ 44 Fed. Reg. 31523-524 (May 31, 1579).
-------
11
however, that the words "in service" cannot be used in the same sense
when applied to the subsequently added containers of contaminated soil
and debris. The reasonable interpretation is that the 30-day period is
. >
to be determined by reference to the date the container is filled with
\ ^
soil and debris, and SEPTA's argument, in fact, assumes as much. Where
SEPTA'S argument fails is in attempting to give the words "in service" a
technical meaning that would prolong the period beyond 30-days for individual
containers because the clean-up took several months. No reason appears and
none is offered by SEPTA as to why each container of the 500 ultimately used
to hold all of the clean-up material, once it was filled, could not within
30-days either have been placed in a proper storage facility or shipped for
disposal. Such treatment would have been clearly within the intendment of the
rule, as expressed in the legislative history, that no PCB item (i .e., the
filled container) could be temporarily stored for more than 30 days. On the
\
other hand, under SEPTA's interpretation, the risk of of potential harm created
by having PCBs stored in substandard facilities would be increased by allowing
.* :
the temporary storage of containers for several months, a result plainly
contrary to what was intended by the regulation.
I find, accordingly, that each container containing PCBs generated by
the clean-up, could be temporarily stored for only 30-days from the date it
was filled with PCBs. A container stored for a longer period had to be
-------
12
stored in an area meeting the requirements of 761.65(b). 12/ .The record
^^^ .
shows that containers filled with PCBs from the clean-up were stored for more
than 30-days in areas that were not curbed as required by 76l.65(b)(i1). 13/
Nor were such containers placed on metal catchpans, which would have been
an acceptable alternative to curbi/ig. 14/
It is also argued by SEPTA that curbing is required only if liquid wastes
are being stored, and none of the containers contained liquids. The EPA
takes issue with SEPTA'S characterization of its wastes as non-liquid, citing
the testimony of Mr. Shrecongost that some of the containers may have held
sludge which he described as "solid, fairly wet material." IS/ All waste
generated in the clean-up, however, appears to have been sufficiently solid
in nature that it could be disposed of as solid waste. 16/ In any event, no
distinction is made in 761.65(b), between the diking requirements for containers
of liquid PCBs and containers of non-liquid PCBs. Where the plain language is
clear, there is no need to go beyond the words to interpret the regulation,
unless the words are at variance with the policy of the regulation as a whole.
Estate of Cowser v. Commissioner of Internal Revenue, 736 F.2d 1168, 1171
1_2/ Not decided in this case is when the 30-day temporary storage period
runs in the case of containers which are intermittently filled with PCBs
over a period of time. Under these circumstances the 30-days could well
run from the date PCBs are first placed in the container. It is un-
necessary to consider that question, however, because there is no evidence
in the record to indicate either that any container was being filled
gradually rather than all at once, or that, if it were, it would have made
any difference in the finding of violation.
1_3_/ Findings of Fact Nos. 8, 13.
-14/ Finding of Fact No. 8.
1_5/ Tr. 70, 84.
1_6/ Complainant's Exh. 7, Attach. 4. '
-------
13
Requiring diking to contain possible spills of non-liquid as well as liquid
PCBs does not appear to be at variance with the policy of the regulation as
a whole.
Finally, both the City and SEPTA fault the EPA for not giving notice
that the containers were improperly stored when the EPA inspected Suburban
Station on September 9, 1982. The City claims that it was prejudiced by
not being told at that time that its containers were illegally stored for
if it had been, the necessity for this present action could have been avoided,
It seems clear from the discussion which went on on September 9th, 1984,
that the EPA inspector made known to the City's resident engineer, Mr. Burns,
that the storage which the inspector observed did not meet the storage re-
quirements for containment. 17/ What was not specifically pointed out was
whether any of the containers observed had been stored for longer than 30
days. 18/ The EPA inspector apparently did not pursue this matter because
the purpose of the inspection was not to find violations but to insure that
the City was familiar with the regulatory requirements. 19/ Moreover, while
the regulations were possibly not as crystal clear as they could have been,
.» :
they were clear enough that the EPA inspectors could have reasonably assumed
that the City understood that no container could be temporarily stored for
more than 30-days after it was filled, unless the City said something to
111 See Tr. 19=20, 38, 41, 43-44, 77, 92. Mr. Burns stated that the
dTscussion about catchpans may have taken place later (Tr. 103), but the
testimony of the EPA inspectors seems to more accurately describe what was
-actually discussed.
18/ Tr. 44.
19/ Tr. 36.
-------
14
indicate otherwise. There is no evidence here that the City during the
September 9th inspection or before or afterwards, made known to the EPA
that it read the regulation in the manner respondents have urged here,
I.e., that'diking or catchpans were not required so long as the containers
remained on the disposal site or the clean-up was being carried on. 20/
The City cannot in good faith claim that it was misled where, as appears
to be the case, it proceeded on an interpretation of the regulations that,
for the reasons already noted was doubtful, to say the least, and without
making any effort to clear the matter up with the EPA. Nor, under these
circumstances, would the EPA be estopped from bringing a penalty action if
it later found that the containers were not being stored in accordance with
regulation requirements.
The Liability of SEPTA
The clean-up in this case which gave rise to the storage violation was
done under the direction and control of the City. SEPTA is included in
this proceeding as'a respondent simply by viture of its being the owner of
Suburban Station. These facts are not disputed. The EPA claims that since
761.65(b), states that "owners or operators" of a facility must comply with"
the storage requirement, SEPTA must be held jointly and severally liable
with the City for the violations. It rests its position on the fact that
owners and operators have been held jointly liable under similar wording
in the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 ("CERCLA"), section 107a, 42 U.S.C. 9607(a), and'in the Clean
Water Act, section 311 (g) of the Clean Water Act, 33 U.S.C. 1321 (g). The
20/ Mr. Burns the City's resident engineer did indicate that it would be
impractical to store the drums in a concrete curbed area but there is no
evidence that the City informed the EPA that the City did not intend to
use metal catchpans. ,
-------
15
cases cited under CERCLA, however, dealt with imposing joint and several
liability on parties when the conduct of each party was a contributing factor
in causing the violation. 21/ Here, SEPTA was responsible for insuring that
the construction being done by the City would not endanger the passengers or
unduly interfere with the operation of the trains. 22f But it took no part
in the decisions made by the City with respect to how the clean-up was done,
and specifically to storing the containers without proper containment, and
it is problematical to what extent SEPTA'S responsibilities gave it any say
in such decisions. The City did send copies of its correspondence to the
EPA to SEPTA, but these do not indicate that the City had consulted or dis-
cussed the matters stated therein with SEPTA. The correspondence also
indicated that the City was complying with the regulatory requirements so
that there was no reason for SEPTA to believe that there was any need for
action on its part if it's right of oversight gave it any authority to
act. 23 / Under these circumstances, SEPTA'S conduct cannot be said to have
been a contributing factor in the violation. The case of United States v.
M/V Big Sam, 681 F.2d 432 (5th Cir. 1982) under section 311 of the Clean
.» :
Water Act cited by the EPA, at first glance seems more in point, since there
the accident was caused solely by the negligence of the operator of a tug
which collided with.a tanker-barge. The operator was operating the tug under
a bareboat charter from the owner. The court, however, based its finding of
joint liability on the definition in the statute of "owner or operator" as
-217 SEE EPA's reply brief at 9.
22/ Tr. 137-38.
23/ See Complainant's Exh. 7, Attach.- 4.
-------
16
meaning any person owning, operating or chartering a vessel. 24/ It
then reasoned that this was intended to impose strict liability for
recovering clean-up costs from oil spills against the owner and
operator jointly, since such a construction would be more consistent
with the legislative intent than permitting a vessel owner to insulate
itself from liability through a charter to an impecunious and uninsured
charterer. M/V Big Sam, supra, 681 F.2d at 438-39. Neither TSCA, nor
the PCB Ban Rule, contain any definition of "owner or operator", which
would indicate that the statute or regulation was intended to impose
joint and several liability on owners of property without regard to whether
they had in anyway caused the violation. Quite the contrary, to do so
would seem inconsistent with the statutory requirement that the degree of
the violator's culpability must be taken into account in determining the
appropriate penalty. 25/ It would mean that an operator who committed
the violation would be allowed to plead mitigating circumstances but the
owner would be barred from pleading special mitigating circumstances that
applied to him. Nothing either in the statue or regulations indicates that
such unequal treatment of respondents was intended. Nor does it appear,
as was true in the case of the Clean Water Act, that effective enforcement
of the regulations requires that the owner of property be held liable with
the operator even though the owner had no involvement in the violation.
In order to impose strict liability on SEPTA for wrongs committed by. its
licensee, there must be an indication that Congress specifically intended
24/ See Clean Water Act, section 311(a)(b), 33 U.S.C. 1321(a)(6).
25/ See TSCA, section !6(a)(2)(B), 15'U.S.C. 2615(a)(2)(B).
-------
17
this result. See Amoco Oil Co. v. Environmental Protection Agency, 543
543 F.2d 270 (D.C. Cir. 1976), (refusing to impose strict liability on
the lessor of a retail gasoline station for violations of the unleaded
gas regulations by the lessee). That indication of intent by Congress,
or even by the Agency, is simply missing here.
Accordingly, the complaint tjs dismissed against SEPTA and no penalty
is imposed.
The Penalty
The EPA's proposed penalty of $45,000 is derived from the PCB Penalty
Policy issued as part of the Agency's guidelines for the assessment of civil
penalties under TSCA, section 16. 26/ Using the GPB matrix contained there
to determine a gravity based penalty, the EPA has classified the violation
as a major storage violation (level three under the circumstances column)
involving a major amount of non-liquid PCBs (100 or more 55-gallon drums).
The gravity based penalty for a violation of that nature is $15,000. 27/
The EPA has then multiplied this penalty by what it terms three days of
"documented violation", namely, the violation observed by the EPA's in-
spectors during their'informal inspectipn on September 9th, the City's
letter of October 26, 1982 (Complainant's Exh. 7, Attachment 4) disclosing
that 450 drums had been accumulated, and the violations observed on the
March 1, 1983 inspection. 28f
The City contends that the penalty calculation fails to comply with the
PCB Penalty Policy in that no adjustment was made for culpability, history
of violations, ability to pay, ability to continue in business and such other
26_/ 45 Fed. Reg. 59776 (September 10, 1980).
27_/ See 45 Fed. Reg. at 59777.
28/ Complainant's main brief at 10.
-------
18
matters as justice may require. The EPA correctly decided that no downward
adjustment for any of these factors, which is presumably all the City is
interested in, was required for the calculation of the gravity based penalty
of $15,000". Since the penalty was designed to apply to first offenders, no
downward adjustment for lack of prior violations would be merited. 29/ The
guidelines also put the burden on-a respondent to prove inability to pay or
inability to continue in business. 30/ This is a reasonable requirement
since the respondent would be the one possessed of the evidence of its
financial condition. 31/ The City did not raise the issue of ability to pay
in its answer and did not present any financial data indicating inability to
pay at the hearing. So far as culpability is concerned, the guidelines would
allow no adjustment downward where the violator had sufficient knowledge to
recognize the hazard created by his conduct and had control over the situation
to avoid committing the violation. 32/ There is no question here that the
City knew that PCBs were a highly toxic substance. The City was also fully
familiar with the requirements of the regulation and had the necessary con-
trol to provide proper storage for the drums. 33/ It was apparently disposed,
however, to give the.requirements a liberal interpretation so as to avoid the
inconvenience or expense of having to provide containment for the drums while
they were being stored at Suburban Station. The City cites its good faith
2_9/ See 45 Fed. Reg. at 59773.
30_/ 45 Fed. Reg. at 59775.
317 See Commonwealth of Puerto Rico v. Federal Maritime Commission, 468
FT2d 872, 881 (D.C. Cir. 1972).
3_2/ 45 Fed. Reg. at 59773.
33_7 See Tr. 103-04, 108-09.
-------
19
efforts in cleaning up Suburban Station and the considerable costs incurred
in the effort. 34/ This makes even less understandable, the City's refusal
to provide at least catchpans for the drums, particularly since the evidence
indicates that this could have been accomplished by a simple change to the
contract for the clean up. 35/ While the City may have honestly believed
1"-~l ^
that it did not have to comply wi'th the storage requirements, i-ts position
was not based on a reasonable interpretation of the regulations, especially
since the City knew it was dealing with a highly toxic material. .Conse-
quently, the EPA was also justified in making no downward adjustment for
culpability in the gravity based penalty. "
A different question arises as to the tripling of the gravity based
penalty by reason of there being'what is described as three documented
violations. While it is true that new drums were being added to the group
of improperly stored drums, what is really involved here is a'repeated
course of conduct over a period of several months. In such cases, multiple
penalties are not routinely assessed under the Penalty Policy but are made
discretionary. 36/ As I read the guidelines, it is not sufficient for the
.» :
EPA to show that the violation persisted over a period of time. The EPA
must also show why in this case the gravity based penalty of $15,000 would
not be an adequate penalty. The guidelines state that the purpose of the
penalty system is to assure that TSCA civil penalties be assessed in a fair,
34/ City's main brief at 3, where it points to having spent approximately
WOO,000 in direct costs and having incurred indirect costs in excess of
"$250,000.
35_/ Tr. 103-04, 108-09.
35/ 45 Fed. Reg. at 59782.
-------
20
uniform and consistent manner, that the penalties are appropriate for
the violation committed, that economic incentives for violating TSCA-are
eliminated and that persons will be deterred from committing TSCA viola
tions. 37/ Fairness, uniformity and consistency In application where the
penalty is discretionary depend on the grounds asserted for assessing
multiple penalties. The EPA, however, cites no ground other than that none
of the drums of waste generated during the clean-up were properly stored.
The guidelines, however, recognize that each separate act of a repeated
course of conduct may not always merit multiple penalties for the viola-
tion. 38/ Turning then to the other reasons that would dictate the need
for multiple penalties, the principal grounds would seem to be to insure
that the penalty be large enough so that economic incentives for violating
TSCA are eliminated. The City by its actions here has demonstrated that it
does try generally to comply with the law. Thus, this matter first came to
the attention of the EPA, because the City called it upon discovering that
it had a PCB problem at Suburban Station. 39/ Nor was the City unmindful
of its obligation to properly clean-up the PCBs and dispose of them.
The steps the City took to correct the problem were thorough so far as
they went. This violation occurred because it would-appear that the
necessity for containing these drums while stored at the site was not as
readily apparent as the dangers confronting the construction workers working
in an area contaminated with PCBs. Whether or not the City regarded the
storage of drums as important a safety consideration as removing PCBs from
the construction site, however, is not the controlling factor. The purpose
_37/ 45 Fed. Reg. at 59770.
38/ 45 Fed. Reg. at 59783.
39_/ Findings of Fact Nos. 3 and 4.
-------
21
of the storage requirements 1s to guard against PCBs entering the environ-
ment through possible spills or accidents while they are 1n storage.' The
likelihood of spills or accidents occurring may seem quite remote, but the
regulation has nevertheless made a policy decision as to what 1s required
and should be complied with. On this record, it cannot be determined
whether the City would have had £p expend more or less than $15,000 to
supply catchpans. Nevertheless, the $15,000 does seem a large enough sum
to substantially diminish any economic gain the City might have realized by
not complying, and to insure that the City will comply in the future with
all PCB regulations. I find, accordingly, that the appropriate penalty is
$15,000.
40/
ORDER
Pursuant to section 16(a) of the Toxic Substances Control Act, 15 U.S.C.
2615(a), a civil penalty of $15,000 Is hereby assessed against Respondent
The City of Philadelphia, for the violations of the Act found herein.
Payment of the full amount of the civil penalty assessed shall be made
within sixty (60) days of the service of the final order upon Respondent by
forwarding to the Reg'ional Hearing Clerk a cashier's check or certified
check payable to the United States of America.
Gerald Harwood
Administrative Law Judge
DATEDiJ-Ufh H,
407 -Unless an appeal is taken pursuant to section 22.30 of the rules of
practice or the Administrator elects to review this decision on his own
motion, the Initial Decision shall become the final order of the
Administrator (See 40 CFR 22.27(c)). "
-------
INITIAL DECISION
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
section 16(a), 15 U.S.C. 2615(a)t to assess civil penalties for violation
of a rule promulgated under section 6(e) of the Act, 15 U.S.C. 2605(e),
regulating the manufacture, processing, distribution in commerce, use,
*
disposal, storage and marking of po-lychlorinated biphenyls ("PCB Ban
Rule"), 40 C.F.R. Part 761. !_/ The administrative, complaint issued by
EPA Region III, charged that Respondents Southeastern Pennsylvania Trans-
portation Authority, the City of Philadelphia and Penn Central Corporation
improperly stored PCBs removed during a PCB cleanup at Suburban Station.
A penalty of $45,000 was requested.
Penn Central Corporation on its unopposed motion was dismissed as a
party to the proceeding. Respondents the City of Philadelphia and South-
eastern Pennslyvania Transportation Authority answered, contesting both
the violation and the appropriateness of the proposed penalty.
A hearing was held in Philadelphia, PA on April 3, 1984. Thereafter
each party submitted proposed findings of fact, conclusions of law and a
.» :
proposed order with a supporting brief. On consideration of the entire
record and the submissions of the parties, a penalty of $15,000 is'
assessed against Respondent the City of Philadelphia. The complaint is
dismissed against Respondent Southeastern Pennsylvania Transportation
I/ Section 16(a) provides in pertinent part as follows: "(1) Any person
who violates a provision of section 15 shall be liable to the United States
for a civil penalty in an amount not to exceed $25,000 for each such
violation. Each day such violation continues shall, for the purposes of
this subsection, constitute a separate violation of section 15."
TSCA, section 15, makes it unlawful among other acts, for any person to
"(1) fail or refuse to comply with . . . (c) any rule promulgated . . .
under section ... 6."
-------
Authority. The findings, conclusions and reasons for the assessment of
this penalty follow. All proposed findings and conclusions inconsistent
with this decision are rejected.
Findings of Fact
1. Respondent Southeastern Pennsylvania Transportation Authority ("SEPTA")
is a transportation authority-authorized under Article III of the
Pennsylvania Urban Mass Transportation Law, 55 P.S. Sec. 600-301,
et. seq. SEPTA is the owner of Suburban Station located at 16th Street
and John F. Kennedy Boulevard, Philadelphia, Pennsylvania. SEPTA has
operated commuter rail services into Suburban Station since January 1,
1983. Stipulation of the parties, Transcript ("Tr.") 2.
2. Respondent, the City of Philadelphia ("City"), is a city of the first
class located in the Commonwealth of Pennsylvania. The City under
a grant from the U.S. Urban Mass Transportation Administration is
constructing a project known as the Center City Commuter Connection.
This work involved major construction in and the renovation of
Suburban Station. Tr. 136; Stipulation, Tr. 3.
3. The City discovered that the track bed and adjacent areas in Suburban '
Station where the construction and renovation work would be done were
extensively contaminated with PCBs, apparently as a result of PCBs
having leaked from train transformers onto the track beds over a
period of many years. Samples taken from various locations in the
work site showed concentrations of PCBs ranging from 720 ppm to
530,000 ppm. Complainant's Exh. 5; Complainant's Exh. 6, p. 1;
Complainant's Exh. 8, Attach. A.
4. In March 1982, at the City's request, representatives of the EPA met
with representatives of the City to discuss decontaminating Suburban
Station of PCBs. Tr. 7-9, 35.
-------
5. At the meeting, the City was told that once the PCS contamination
was disturbed the PCBs would have to be stored, marked and disposed
of in accordance with the PCB regulations. A copy of the PCB regula-
tions was given to the City. Tr. 8-9.
*
6. On August 24, 1982, the EPA met with the City to again discuss the
decontamination of Suburban Station. One item discussed was the
storage of the cleaned-up PCBs until they were disposed of. The
EPA told the City that under the PCB regulations the temporary
storage of PCBs without curbing could not exceed 30 days. 2/ Tr. 18,
72-73.
7. As a follow-up to the August 24th meeting, EPA representatives,
Christopher Pilla, Edward Cohen and Roland Shrecongost, on September 9,
1982, made an inspection of Suburban Station. The inspection had been
arranged with Thomas Burns, the City's resident engineer for the
Suburban Station renovations, who was present at the inspection. Tr. 19,
97, 107.
8. Mr. Pilla on the'September 9 inspection saw a number of drums of PCB
waste material stored on the platforms in areas'which were not curbed.
He told Mr. Burns that the regulation required that drums stored for more
than 30-days must be stored in a curbed area. He also suggested that as
an alternative to curbing the City could use metal catchpans for contain-
ment. Tr. 20, 43-44, 77, 103.
2/ See the storage for disposal requirements, 40 C.F.R. 761.65, which in
-Ihe testimony is referred to under its former numbering, 40 C.F.R. 761.42.
Effective May 6, 1982, the PCB Ban Rule was renumbered without any substantive
changes. 47 Fed. Reg. 19526 (May 6, 1982). References in this opinion will
be to the present numbering.
-------
9. On October 26, 1982, the City wrote to the EPA about its.progress in
*
the PCB cleanup at Suburban Station. With respect to the drums of
PCB waste, the City stated as follows:
Approximately 450 drums containing PCB waste were generated
by the clean-up. . . . [T]hese drums will be expeditiously
removed from the Station-and transported to SCA Services'
hazardous waste facility in Model City, New York for final
disposal. Our analysis has determined that all the waste can
be considered solid for purposes of disposal.
Complainant's Exh. 7, Attach. 4.
10. On February 28, 1983, the EPA received a complaint from a private
citizen that drums of PCBs were located on a publicly accessible train
platform at Suburban Station (Tr. 22, 39, 53; Complainant's Exh. 7, p. 1),
11. Mr. Pilla called Mr. Burns and arranged to inspect Suburban Station on
March 1, 1983. On that day, Mr. Pilla saw about 200 drums of PCB
material on platform No. 3. The area was not curbed andjthe drums were
not contained in metal catchpans. Tr. 23, 32; Complainant's Exh. 7,
p. 2. .
12. At the March 1st inspection Mr. Pi 11 a was handed a letter from the City
dated March 1, 1983, stating that 500 drums of PCB solid waste and
construction debris had been generated by the cleanup of the Station and
were being assembled for transportation to an approved PCB landfill. It
was further stated that the drums were scheduled to be removed from the
Station over the weekend of March 12-13. Tr. 29-30; Complainant's
Exh. 7, Attach. 3. ;
13. Mr. Pilla inspected Suburban Station again on March 13, 1983. All
drums of PCB waste had been removed from the Station. He also in-
-------
5
spected the underplatform areas where the drums had been stored.
None of these storage areas had any curbing nor was there evidence
of any metal catchpans having been used. Tr. 31. 56; Complainant's
Exh. 7, p. 2.
14. The approximately 500 drums of PCB contaminated material collected
during the Suburban Station cleanup were filled between May 1932 and'
February 1983 (Tr. 43, 98-100).
15. SEPTA as owner of Suburban Station granted to the City a license to
come upon the Station property to do the construction and renovation
work for the Center City Commuter Connection project. It was the City
however, which obtained the federal grant to fund the project and
contracted for the work to carry it out including the clean-up of PCBs
at Suburban Station. The City selected and engaged the services of the
contractor to do the PCB clean-up and decided what the work would include.
Tr. 103, 109, 133, 136-37; Stipulation, Tr. 2-3; Complainant's Exh. 8.
Discussion and Conclusions
The specific, storage violations charged in the complaint were that drums
of PCB waste material designated for disposal had been stored in facilities
which did not have proper curbing, and which were below the 100-year flood
water elevation. The charge that the PCB drums were stored below the 100-year
flood water elevation, however, was withdrawn at the beginning of the hearing. 3_/
Consequently the only violation remaining to be considered is whether there was
a violation of the requirement that the drums should have been stored in
facilities having continuous curbing at least six inches high.
3/ Tr. 3-4.
-------
See 40 C.F.R. 761.65(b)(l)(1i). The record also disclosed that in lieu of
continous curbing, the EPA would have accepted the use of metal catchpans
as an alternative means of providing containment. 4/ It 1s not disputed
that the PCB drums were not stored either in a facility with continuous
curbing or on metal catchpans.
The EPA's position with respect to the violation is straightforward.
There was no obligation to clean up the PCBs on the track beds and adjacent
areas since they were "historical" PCBs, i.e., had been in place prior to
February 17, 1978, the date of publication of the original PCB Disposal and
Marking Rule. 5/ Each container of PCBs resulting from the clean up, however,
and stored for disposal, according to 40 C.F.R. 761.60(a)(6) and (c)(3), must
be stored in a facility that complies with 761.65(b), unless it is "temporarily1
stored for no more than 30 days from the date of its removal from service.
The City's position appears to be that the governing date for the storage
requirements is when the clean-up was completed and all the PCB filled drums
were removed from the decontamination site for a shipment to a disposal site.
It relies upon a note"-placed as a preamble to the storage and disposal regu-
lations under Subpart D which reads in pertinent part as follows:
NOTE: This Subpart [D] does not require removal
of PCBs and PCB Items from service and dis-
posal earlier than would normally be the case.
However, when PCBs and PCB Items are removed
from service and disposed of, disposal must be
undertaken in accordance with these regulations.
PCBs (including'soils and debris) and PCB Items
.£/ Findings of Fact No. 9, supra.
5/ See 43 Fed. Reg. 7150. The disposal and marking requirements were
subsequently incorporated into the final PCB Ban Rule. See 44 Fed. Reg.
31514 (May 31, 1979).
-------
which have been placed in a disposal site are.
considered to be "in service" for purposes of
the applicability of this subpart. This sub-
part does not require PCBs and PCS Items land-
filled, prior to February 17, 1978 to be removed
for disposal. However, if such PCBs or PCB
Items are removed from the disposal site, they
must be disposed of in accordance with this
subpart. * * *
The City argues that the decontamination site at Suburban Station is
a "disposal site" under the definition of "disposal" in the PCB Ban Rule
(40 C.F.R. 761.3(b)). Accordingly, the City claims that as long as the
PCB filled drums remained on the decontamination site they were considered
to be in service and not subject to the storage for disposal requirements.
Such an interpretation rests upon reading considerably more into the note
than is justified by its wording.
For purposes of this decision it can be assumed that the decontami-
nation site is a "disposal site" within the meaning of the note. The
language in the note referring to the removal of PCBs "from service",
however, can also refer to the cleaning up of the PCBs by scraping, de-
greasing, washing, etc. from the surfaces where they had been deposited. 6/
^ " ^^
In fact, this would be the most obvious way to read the note. It would seem
that PCBs are usually placed in a disposal site to be permanently disposed
"of there. Under the note, then, they would be considered to remain in
service as long as they were undisturbed. In any event, the lack of merit
in the City's argument is demonstrated by the fact that under the City's
6/ The parties themselves characterize the cleaning up of the PCBs as
the removal of PCBs. See Complainant's Exh. 7, Attachment 2, where the
-City in writing to the EPA in October 1982, says, "[the contractor] has
recently successfully completed its clean-up efforts at the Station. In
the areas that were cleaned, 95-99 percent of the PCBs that were present
have been removed." The "removal" referred to was obviously to the clean-
up of the PCB material itself and not to the shipment of the drums, since
the drums were still being stored at the station.
-------
8
interpretation the PCB drums could have been stored indefinitely at the
site, which would have been tantamount to permitting their disposal at
other than at an EPA approved facility. The City, however, never questioned
that the drums had to be eventually disposed of at an EPA approved facility. TJ
I find, accordingly, that the storage requirements became applicable once
the PCBs were removed by scraping, degreasing, washing, etc. from the surfaces
where they lay. 8/
Section 761.65(c)(l) of the regulations, however, permits the temporary
storage of certain PCB items for up to 30 days without complying with the
storage requirements, provided that there is attached to the item a notation
indicating the date it was removed from service. The pertinent language is
as follows:
(c)(l) The following PCB Items may be
stored temporarily in an area that does
not comply with the requirements of
paragraph (b) of this section for up to
thirty days from the date of their re-
moval from service, provided that a
notation is attached to the PCB Item or
a PCB Container (containing the item)
indicating the date the item was removed
from service:
(i) Non-leaking PCB Articles and PCB
Equipment;
(ii) Leaking PCB Articles and PCB
Equipment if the PCB Items are placed in
a non-leaking PCB Container that contains-
sufficient sorbent materials to absorb any
liquid PCBs remaining in the PCB Items;
TJ Although the City first considered entombment of the PCBs at a specially
constructed facility at the Station, it finally decided against this,
apparently because of the difficulty of obtaining EPA approval of the pro-
cedure. Tr.-71-72.
8/ The clearest application of the note would be to the obligation to re-
Fispose of PCBs which had been disposed of prior to the publication of the
PCB regulations. A study of the legislative history of the note indicates
that the language of the note relied on by the City had its origin in just
such a situation. See 43 Fed. Reg. -33918-919 (August 2, 1978).
-------
(ill) PCB Containers containing non-
liquid PCBs such as contaminated soil,
rags, and debris; and
(iv) PCB Containers containing liquid
PCBs at a concentration between 50 and
500 ppm, provided a Spill Prevention,
Control and Countermeasure Plan has been
prepared fj*r the temporary storage area in
accordance'with 40 CFR Part 112. In
addition, each container must bear a
notation that indicates that the liquid in
the drum do not exceed 500 ppm PCB.
It is to be noted that the temporary storage permitted is for the
PCB containers filled with the PCB material rather than for the material
itself. It is assumed, however, or at least no one has argued to the
contrary, that in cleaning up PCBs, the PCB material, as part of the
clean-up, can be put into containers with the containers then becoming
subject to the 30-day temporary storage rule.
SEPTA argues that the regulation in speaking of removal from service
uses terms appropriate to a group of containers, i.e., "their removal from
service", and that, therefore, it was intended that where a number of con-
tainers are filled in a clean-up which continues over a period of time, the..
30-day storage period starts to run from the date the last container is
filled. Under this construction there would have been no violation since.
the containers were-shipped for disposal within 30-days after the last
container was filled. The logical reading, however, is that the plural
"their" in the phase "their removal from service" simply refers generally
to the several different kinds of PCB items, PCB containers being only one
such item, for which temporary storage is permitted, and that that particular
provision was not intended to deal with determining the date on which any
particular item was removed from service.
-------
10
SEPTA'S interpretation is also questionable because the result of
permitting the storage of containers in a substandard storage area for 8
to 10 months, seems totally inconsistent with the entire thrust of the regu-
lation which is to limit temporary storage to 30-days. This is even more
apparent when one examines the legislative history of the regulation.
The original marking and disposal rule permitted the temporary storage
only of PCB articles and equipment if they were non-leaking or in non-
leaking containers. _9_/ PCB articles and equipment are manufactured items
other than containers such as transformers, or capacitors or electric
equipment. 10/ When the PCB Ban Rule was issued, the regulation was amended
to permit the temporary storage of PCB containers of non-liquid wastes and
of liquids with low concentrations (50-500 ppm) of PCBS. With respect to
containers of non-liquid wastes, it was explained that their temporary storage
was permitted because such containers do not pose any greater hazard than
non-leaking containers of leaking articles. 11/ With an article like a
i
transformer or capacitor there would usually be no question of the date when
it is removed from service, the word service being given its normal meaning"
of being in-use. This appears to be the meaning that "service" also has
in the phrase "in service" in the preamble to Subpart D. It is obvious,
9/ Marking and disposal rule, section 761.42(c)(l), 43 Fed. Reg. 7162
jFebruary 17, 1978), as amended by 43 Fed. Reg". 33198 (August 2, 1978).
Section 761.42 along with the other provisions of the marking and disposal
rule was incorporated with modifications and amendments into the PCB Ban
Rule. Supra, n 5. Section 761.42 was redesignated 761.65 at 47 Fed. Reg.
19527 (T9H2J.
10/ Marking and disposal rule, sections 761.2(r),(v), 43 Fed. Reg. at
7T57. These definitions are now found in 761.3(t), (w).
ll/ 44 Fed. Reg. 31523-524 (May 31, 1979).
-------
11
however, that the words "in service" cannot be used in the same sense
when applied to the subsequently added containers of contaminated soil
and debris. The reasonable interpretation is that the 30-day period is
, >
to be determined by reference to the date the container is filled with
v i
soil and debris, and SEPTA'S argument, in fact, assumes as much. Where
SEPTA'S argument fails is in attempting to give the words "in service" a
technical meaning that would prolong the period beyond 30-days for individual
containers because the clean-up took several months. No reason appears and
none is offered by SEPTA as to why each container of the 500 ultimately used
to hold all of the clean-up material, once it was filled, could not within
30-days either have been placed in a proper storage facility or shipped for
disposal. Such treatment would have been clearly within the intendment of the
rule, as expressed in the legislative history, that no PCB item (i.e., the
filled container) could be temporarily stored for more than 30 days. On the
\
other hand, under SEPTA'S interpretation, the risk of of potential harm created
by having PCBs stored in substandard facilities would be increased by allowing
.''
the temporary storage of containers for several months, a result plainly
contrary to what was intended by the regulation.
I find, accordingly, that each container containing PCBs generated by
the clean-up, could be temporarily stored for only 30-days from the date it
was filled with PCBs. A container stored for a longer period had to be
-------
12
stored in an area meeting the requirements of 761.65(b). 12/ .The record
^^^"
shows that containers filled with PCBs from the clean-up were stored for more
than 30-days in areas that were not curbed as required by 761.65(b)(ii). 13/
Nor were such containers placed on metal catchpans, which would have been
an acceptable alternative to curbi/ig. 14/
It is also argued by SEPTA that curbing is required only if liquid wastes
are being stored, and none of the containers contained liquids. The EPA
.takes issue with SEPTA's characterization of its wastes as non-liquid, citing
the testimony of Mr. Shrecongost that some of the containers may have held
sludge which he described as "solid, fairly wet material." 15/ All waste
generated in the clean-up, however, appears to have been sufficiently solid
in nature that it could be disposed of as solid waste. 16/ In any event, no
distinction is made in 761.65(b), between the diking requirements for containers
of liquid PCBs and containers of non-liquid PCBs. Where the plain language is
clear, there is no need to go beyond the words to interpret the regulation,
unless the words are at variance with the policy of the regulation as a whole.
Estate of Cowser v. Commissioner of Internal Revenue, 736 F.2d 1168, 1171
12/ Not decided in this case is when the 30-day temporary storage period
runs in the case of containers which are intermittently filled with PCBs
over a period of time. Under these circumstances the 30-days could well
run from the date PCBs are first placed in the container. It is un-
necessary to consider that question, however, because there is no evidence
in the record to indicate either that any container was being filled
gradually rather than all at once, or that, if it were, it would have made
any difference in the finding of violation.
1_3/ Findings of Fact Nos. 8, 13.
-W Finding of Fact No. 8.
!§/ Tr. 70, 84.
16/ Complainant's Exh. 7, Attach. 4."'
-------
13
Requiring diking to contain possible spills of non-liquid as well as liquid
PCBs does not appear to be at variance with the policy of the regulation as
a whole.
Finally, both the City and SEPTA fault the EPA for not giving notice
that the containers were improperly stored when the EPA inspected Suburban
Station on September 9, 1982. The City claims that it was prejudiced by
not being told at that time that its containers were illegally stored for
if it had been, the necessity for this present action could have been avoided.
It seems clear from the discussion which went on on September 9th, 1984,
that the EPA inspector made known to the City's resident engineer, Mr. Burns,
that the storage which the inspector observed did not meet the storage re-
quirements for containment. 17/ What was not specifically pointed out was
whether any of the containers observed had been stored for longer than 30
days. 18/ The EPA inspector apparently did not pursue this matter because
the purpose of the inspection was not to find violations but to insure that
the City was familiar with the regulatory requirements. 19_/ Moreover, while
the regulations were possibly not as crystal clear as they could have been,
.» :
they were clear enough that the EPA inspectors could have reasonably assumed
that the City understood that no container could be temporarily stored for
more than 30-days after it was filled, unless the City said something to
17/ See Tr. 19=20, 38, 41, 43-44, 77, 92. Mr. Burns stated that the
dTscussion about catchpans may have taken place later (Tr. 103), but the
testimony of the EPA inspectors seems to more accurately describe what was
-actually discussed.
18/ Tr. 44.
19/ Tr. 36.
-------
14
indicate otherwise. There is no evidence here that the City during the
September 9th inspection or before or afterwards, made known to the EPA
that it read the regulation in the manner respondents have urged here,
I.e., that diking or catchpans were not required so long as the containers
remained on the disposal site or the clean-up was being carried on. 207
The City cannot in good faith claim that it was misled where, as appears
to be the case, it proceeded on an interpretation of the regulations that,
for the reasons already noted was doubtful, to say the least, and without
making any effort to clear the matter up with the EPA. Nor, under these
circumstances, would the EPA be estopped from bringing a penalty action if
it later found that the containers were not being stored in accordance with
regulation requirements.
The Liability of SEPTA
The clean-up in this case which gave rise to the storage violation was
done under the direction and control of the City. SEPTA is included in
this proceeding as a respondent simply by viture of its being the owner of
Suburban Station. These facts are not disputed. The EPA claims that since
761.65(b), states that'"owners or operators" of a facility must comply with'
the storage requirement, SEPTA must be held jointly and severally liable
with the City for the violations. It rests its position on the fact that
owners and operators have been held jointly liable under similar wording
in the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 ("CERCLA"), section 107a, 42 U.S.C. 9607(a), and'in the Clean
Water Act, section 311(g) of the Clean Water Act, 33 U.S.C. 1321 (g). The
20/ Mr. Burns the City's resident engineer did indicate that it would be
impractical to store the drums in a concrete curbed area but there is no
evidence that the City informed the EPA that the City did not intend to
use metal catchpans. ,
-------
15
cases cited under CERCLA, however, dealt with imposing joint and several
liability on parties when the conduct of each party was a contributing factor
in causing the violation. 21/ Here, SEPTA was responsible for insuring that
the construction being done by the City would not endanger the passengers or
unduly interfere with the operation of the trains. 22/ But it took no part
in the decisions made by the City with respect to how the clean-up was done,
and specifically to storing the containers without proper containment, and
it is problematical to what extent SEPTA'S responsibilities gave it any say
in such decisions. The City did send copies of its correspondence to the
EPA to SEPTA, but these do not indicate that the City had consulted or dis-
cussed the matters stated therein with SEPTA. The correspondence also
indicated that the City was complying with the regulatory requirements so
that there was no reason for SEPTA to believe that there was any need for
action on its part if it's right of oversight gave it any authority to
act. 23/ Under these circumstances, SEPTA'S conduct cannot be said to have
been a contributing factor in the violation. The case of United States v.
M/V Big Sam, 681 F.2d 432 (5th Cir. 1982) under section 311 of the Clean
.» = .
Water Act cited by the EPA, at first glance seems more in point, since there
the accident was caused solely by the negligence of the operator of a tug
which collided with.a tanker-barge. The operator was operating the tug under
a bareboat charter from the owner. The court, however, based its finding of
joint liability on the definition in the statute of "owner or operator" as
-2\J SEE EPA's reply brief at 9.
22/ Tr. 137-38.
237 See Complainant's Exh. 7, Attach.- 4.
-------
16
meaning any person owning, operating or chartering a vessel. 24/ It
^^" m
then reasoned that this was intended to impose strict liability for
recovering clean-up costs from oil spills against the owner and
operator jointly, since such a construction would be more consistent
with the legislative intent than permitting a vessel owner to insulate
itself from liability through a charter to an impecunious and uninsured
charterer. M/V Big Sam, supra. 681 F.2d at 438-39. Neither TSCA, nor
the PCB Ban Rule, contain any definition of "owner or operator", which
would indicate that the statute or regulation was intended to impose
joint and several liability on owners of property without regard to whether
they had in anyway caused the violation. Quite the contrary, to do so
would seem inconsistent with the statutory requirement that the degree of
the violator's culpability must be taken into account in determining the
appropriate penalty. 25/ It would mean that an operator who committed
the violation would be allowed to plead mitigating circumstances but the
owner would be barred from pleading special mitigating circumstances that
applied to him. Nothing either in the statue or regulations indicates that
such unequal treatment of respondents was intended. Nor does it appear,
as was true in the case of the Clean Water Act, that effective enforcement.
of the regulations requires that the owner of property be held liable with
the operator even though the owner had no involvement in the violation.
In order to impose strict liability on SEPTA for wrongs committed by. its
licensee, there must be an indication that Congress specifically intended
24/ See Clean Water Act. section 311(a)(b), 33 U.S.C. 1321(a)(6).
25/ See TSCA, section 16(a)(2)(B), 15'U.S.C. 2615(a)(2)(B).
-------
17
this result. See Amoco Oil Co. v. Environmental Protection Agency, 543
543 F.2d 270 (D.C. Cir. 1976), (refusing to impose strict liability pn
the lessor of a retail gasoline station for violations of the unleaded
gas regulations by the lessee). That indication of intent by Congress,
or even by the Agency, is simply missing here.
Accordingly, the complaint i£ dismissed against SEPTA and no penalty
is imposed.
The Penalty
The EPA's proposed penalty of $45,000 is derived from the PCB Penalty
Policy issued as part of the Agency's guidelines for the assessment of civil
penalties under TSCA, section 16. 26/ Using the GPB matrix contained there.
to determine a gravity based penalty, the EPA has classified the violation
as a major storage violation (level three under the circumstances column)
involving a major amount of non-liquid PCBs (100 or more 55-gallon drums).
The gravity based penalty for a violation of that nature is $15,000. 27/
The EPA has then multiplied this penalty by what it terms three days of
"documented violation", namely, the violation observed by the EPA's in-
spectors during their'informal inspectipn on September 9th, the City's
letter of October 26, 1982 (Complainant's Exh. 7, Attachment 4) disclosing
that 450 drums had been accumulated, and the violations observed on the
March 1, 1983 inspection. 28/
The City contends that the penalty calculation fails to comply with the
PCB Penalty Policy in that no adjustment was made for culpability, history
of violations, ability to pay, ability to continue in business and such other
26/ 45 Fed. Reg. 59776 (September 10, 1980).
27/ See 45 Fed. Reg. at 59777.
28/ Complainant's main brief at 10.-
-------
18
matters as justice may require. The EPA correctly decided that no downward
adjustment for any of these factors, which is presumably all the City 1s
interested in, was required for the calculation of the gravity based penalty
of $15,000". Since the penalty was designed to apply to first offenders, no
downward adjustment for lack of prior violations would be merited. 29/ The
guidelines also put the burden on-a respondent to prove inability to pay or
inability to continue in business. 30/ This is a reasonable requirement
since the respondent would be the one possessed of the evidence of its
financial condition. 31/ The City did not raise the issue of ability to pay
in its answer and did not present any financial data indicating inability to
pay at the hearing. So far as culpability is concerned, the guidelines would
allow no adjustment downward where the violator had sufficient knowledge to
recognize the hazard created by his conduct and had control over the situation
to avoid committing the violation. 32/ There is no question here that the
City knew that PCBs were a highly toxic substance. The City was also fully
familiar with the requirements of the regulation and had the necessary con-
trol to provide proper storage for the drums. 33/ It was apparently disposed,
however, to give the .requirements a liberal interpretation so as to avoid the
inconvenience or expense of having to provide containment for the drums while
they were being stored at Suburban Station. The City cites its good faith
23J See 45 Fed. Reg. at 59773.
30/ 45 Fed. Reg. at 59775.
31/ See Commonwealth of Puerto Rico v. Federal Maritime Commission, 468
FT2d 872, 881 (D.C. Cir. 197Z).
3_2/ 45 Fed. Reg. at 59773.
33_/ See Tr. 103-04, 108-09.
-------
19
efforts in cleaning up Suburban Station and the considerable costs incurred
in the effort. 34/ This makes even less understandable, the City's refusal
to provide at least catchpans for the drums, particularly since the evidence
indicates that this could have been accomplished by a simple change to the
contract for the clea.n up. 35/ While the City may have honestly believed
"" ^*.
that it did not have to comply wi'th the storage requirements, its position
was not based on a reasonable interpretation of the regulations, especially
since the City knew it was dealing with a highly toxic material. .Conse-
quently, the EPA was also justified in making no downward adjustment for
culpability in the gravity based penalty.
A different question arises as to the tripling of the gravity based '.
penalty by reason of there being'what is described as three documented
violations. While it is true that new drums were being added to the group
of improperly stored drums, what is really involved here is a-repeated
course of conduct over a period of several months. In such cases, multiple
penalties are not routinely assessed under the Penalty Policy but are made
discretionary. 36/ As I read the guidelines, it is not sufficient for the
.» :
EPA to show that the violation persisted over a period of time. The EPA
must also show why in this case the gravity based penalty of $15,000 would
not be an adequate penalty. The guidelines, state that the purpose of the
penalty system is to assure that TSCA civil penalties be assessed in a fair,
34/ City's main brief at 3, where it points to having spent approximately
1900,000 in direct costs and having incurred indirect costs in excess of
'$250,000.
3_5/ Tr. 103-04, 108-09.
35/ 45 Fed. Reg. at 59782.
-------
20
uniform and consistent manner, that the penalties are appropriate for
the violation committed, that economic incentives for violating TSCA-are
eliminated and that persons will be deterred from committing TSCA viola
tions. 37/' Fairness, uniformity and consistency 1n application where the
penalty is discretionary depend on the grounds asserted for assessing
multiple penalties. The EPA, however, cites no ground other than that none
of the drums of waste generated during the clean-up were properly stored.
The guidelines, however, recognize that each separate act of a repeated
course of conduct may not always merit multiple penalties for the viola-
tion. 38/ Turning then to the other reasons that would dictate the need
for multiple penalties, the principal grounds would seem to be to insure
that the penalty be large enough so that economic incentives for violating
TSCA are eliminated. The City by its actions here has demonstrated that it
does try generally to comply with the law. Thus, this matter first came to
the attention of the EPA, because the City called it upon discovering that
it had a PCB problem at Suburban Station. 39/ Nor was the City unmindful
of its obligation to properly clean-up the PCBs and dispose of them.
The steps the City took to correct the problem were thorough so far as
they went. This violation occurred because it would-appear that the
necessity for containing these drums while stored at the site was not as
readily apparent as the dangers confronting the construction workers working
in an area contaminated with PCBs. Whether or not the City regarded the
storage of drums as important a safety consideration as removing PCBs from
the construction site, however, is not the controlling factor. The purpose
_37/ 45 Fed. Reg. at 59770.
38/ 45 Fed. Reg. at 59783.
39/ Findings of Fact Nos. 3 and 4.
-------
21
of the storage requirements 1s to guard against PCBs entering the environ-
ment through possible spills or accidents while they are 1n storage.* The
likelihood of spills or accidents occurring may seem quite remote, but the
regulation has nevertheless made a policy decision as to what 1s required
and should be. complied with. On this record, it cannot be determined
whether the City would have had tp expend more or less than $15,000 to
supply catchpans. Nevertheless, the $15,000 does seem a large enough sum
to substantially diminish any economic gain the City might have realized by
not complying, and to insure that the City will comply in the future with
all PCB regulations. I find, accordingly, that the appropriate penalty is
$15,000.
40/
ORDER
Pursuant to section 16(a) of the Toxic Substances Control Act, 15 U.S.C.
2615(a), a civil penalty of $15,000 is hereby assessed against Respondent
The City of Philadelphia, for the violations of the Act found herein.
Payment of the full amount of the civil penalty assessed shall be made
within sixty (60) days of the service of the final order upon Respondent by
forwarding to the Reg'ional Hearing Clerk a cashier's check or certified
check payable to the United States of America.
DATED:
Gerald Harwood
Administrative Law Judge
40/ -Unless an appeal is taken pursuant to section 22.30 of the rules of
practice or the Administrator elects to review this decision on his own
motion, the Initial Decision shall become the final order of the
Administrator (See 40 CFR 22.27(c)). "
-------
35
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (-y r
BEFORE THE ADMINISTRATOR ' '°/p
In the Matter of
Robert Ross & Sons, Inc.,
Docket No. TSCA-V-C-008
Application for Attorneys'
Fees and Expenses Under the
Equal Access to Justice Act
Recommended Decision
This proceeding arises from an application by Robert Ross & Sons,
Inc.A/ for attorneys' fees and expenses under the Equal Access to
Justice Act (5 U.S.C. § 504). The application results from a complaint,
issued.by the Director of the Enforcement Division, U.S. .Environmental
Protection Agency, Region V on March 31, 1980, charging Robert Ross &
Sons, Inc., hereinafter Ross or applicant, with violations of the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.). Following a hearing
in Chicago, Illinois 'during the period September 22 - 24, 1981, the ALJ
issued an initial decision on February 1, 1982, dismissing the complaint
for the reason that Complainant had not shown that Ross had improperly
disposed of PCBs as charged. Complainant appealed the dismissal in part
and in a final decision, dated April 4, 1984 (TSCA Appeal No. 82-4), the
Judicial Officer affirmed the dismissal. Ross filed an application for
I/ The application reflects that effective December 1, 1981, Robert
Ross & Sons, Inc. was reorganized into four separate corporations.
-------
attorneys' fees and expenses on March 2, 1982, and an amended application
on May 2,. 1984, EPA having in the meantime promulgated regulations (40 CFR
Part 17) implementing the Act. The application was referred to the ALJ
for preparation of a recommended decision by an order from the Judicial
Officer, dated July 19, 1984.
Although the applicant originally requested a hearing on the appli-
cation, that request was withdrawn by a letter to the ALJ, dated August 16,
1984. Based on the record as presently constituted, I find that the
following facts are established:^/
Findings of Fact
1. The complaint, issued on March 31, 1980, charged Ross with improper
disposal (incineration) of PCBs of greater than 500 ppm, to-wit 4400
ppm and 760 ppm, in violation of § 6 of TSCA and 40 CFR 761.10 (1979).
Ross was also charged with improper disposal of PCB laden waste oils
in concentrations of 67.3 ppm in violation of § 6 of the Act and 40
CFR 761.10.
." .
2. Samples upon which the first charge of improper disposal was based
were drawn from an 80,000-gallon tank (SOI) and from a 17,000-gallon
tank (503) at the time-of an inspection of the Ross facility conducted
by representatives of EPA on July 10, 1979. The sample (S28) upon
which the second charge of improper disposal was based was drawn from
an excavated area at the facility referred to as the "mixing pit" at
the time of an inspection on November 5, 1979.
2J Findings are based on the initial decision unless otherwise
indicated.
-------
3. EPA's Central Regional Laboratory (CRL) analyzed the samples utilizing
gas chromatography with electron capture detection (GCEC) and reported
PCB concentrations of 4400 ppm in sample SOI, 760 ppm in sample 503
and 67.3 ppm in sample S28. CRL reported a PCB concentration of 95
ppm on a second sample (508) drawn from the 80,000-gallon tank
during the inspection on July 10, 1979. This sample was not used
as a basis for a charge against Ross.
4. The contents of the 80,000-gallon tank were incinerated some-time
during the period July 10 to October 2, 1979. Complainant did not
present any evidence at the hearing that the contents of the 17,000-
gallon tank were disposed of in a similar fashion. Likewise,
Complainant did not present any evidence at the hearing as to the
disposition of the material found in the mixing pit on November 5,
1979.
5. Analysis of a sample drawn from the 17,000-galIon tank by representa-
tives of the Ohio EPA on October 2, 1979, revealed a PCB concentration
of 11.89 ppm. Analyses by Environmental Research Group, Inc., a
.* : "'
.testing and consulting firm employed by Ross, of what purported to be
duplicates of sample S28 drawn from the mixing pit on November 5,
1979, revealed PCB concentrations of 10 and 15 ppm.
6. The Ross incinerator did not comply with Annex I, 40 CFR 761.40 (1979).
7. The instrument utilized by CRL to test for the presence of PCBs
(GCEC) produces a strip-chart recording referred to as a chromatogram.
Identification of PCBs is made by comparing the chromatogram of the
sample with chromatograms of PCB standards. PCB concentration is
determined by use of a formula involving the concentration of the
-------
standard times the area of the sample divided by the area of the
»
standard times the final volume of the diluted sample divided by the
weight of the sample. Although these calculations are normally
made by a computer, there are instances wherein the calculations
are performed manually.
8. In order to conduct' the tests, it is necessary to dilute the portion
of the sample injected into the chromatograph and this dilution must
.be recognized in calculating PCB concentrations. Computer printouts
of CRL calculations on samples SOI and S03 are in terms of micrograms
per liter or parts per billion (ug/1) and it is necessary to divide
by 1,000 in order to convert to parts per million. The printout
for sample SOI reflects a PCB concentration of 4377.56 ug/1.
9. Ross denied the alleged violations, contending, inter alia, that
the samples were not representative and that the tests we're
improperly conducted.
10. In dismissing the complaint, the ALJ found, inter alia, that sample
SOI from the.80,000-gallon tank was only a "grab sample" and not
representative of the contents of the tank and that there was no
evidence indicating the PCB concentration of any portion of the
waste at the time of incineration. Because there was no evidence
of the dilution of Ross' waste to reduce PCB concentrations below
50 ppm (40. CFR 761.l(b)) or of the addition thereto of PCBs in
concentrations of 500 ppm or greater (40 CFR 761.10(g)(ii)), it was
concluded that these provisions of the regulations were not
applicable. Although Complainant did not explain how the PCB
concentration of 4377.56 ug/1 shown on the computer printout for
-------
sample SOI (finding 8) became the reported result of 4400 ppm, Ross1
expert was apparently able to duplicate this result from an examination
of the CRL file and the ALJ concluded that Ross had not established
its contention that the test on this sample was improperly conducted
or calculated.
11." The ALJ found that wastes present in the 17,000-gallon tank on July 10,
1979, were the same wastes in the tank on October 2, 1979, and that
Complainant had not established its contention that the contents of
that tank had been incinerated or otherwise improperly disposed of
during that period as charged. Regarding sample S28 collected from
the mixing pit on November 5, 1979, the ALJ found that Complainant
had not established by a preponderance of the evidence that this
sample contained PCBs in excess of 50 ppm as charged. Moreover, he
found that there was no evidence as to the disposition of the waste
present in the mixing, pit on November 5, 1979.
12. Complainant appealed the ALJ's decision only as to the sample referred
to as SOI. Respondent, although agreeing that the dismissal was
.? :
.proper, filed a protective appeal as to that part of the decision
holding test results had not been shown to have been improperly
conducted or calculated. The Judicial Officer held that even though
the sample was not representative, it, nevertheless, had probative
value, but sustained the dismissal for the reason that Complainant
has failed to prove that the sample in question contained PCBs in
excess of 50 ppm (Final Decision, TSCA Appeal No. 82-4, April 4,
1984). He reached this conclusion, because the computer printout
showing PCB concentrations in sample SOI (finding 8) reported
-------
results in terms of micrograms per liter or parts per billion and
dividing the reported figure (4377.56) by 1,000 would result in a
PCB concentration of only 4.4 ppm. It was concluded that Complainant
had not sustained its burden of proving the violation charged.
13. Ross filed an initial application for attorneys' fees and expenses
under the Equal Access to Justice Act (EAJA or Act) (5 U.S.C. 504)
on March 2, 1982, within 30 days of the receipt of the ALJ's decision.
At the time, EPA had not promulgated regulations implementing the Act.
The application requested a total of $69,672.35, consisting of
$43,181.25 in attorneys' fees (575.75 hours at the rate of $75.00 per
hour), $24,237 in fees and expenses for expert witness and the
balance of $2,254.10 in miscellaneous fees and expenses.
14. Subsequent to the final decision, Ross submitted an amended applica-
tion for fees and expenses pursuant to the EAJA (letter -to Judicial
Officer, dated May 2, 1984). The amended application reflected an
additional 119.5 hours at $75 an hour expended in perfecting and
supporting Ross" appeal and opposing Complainant's appeal, making a
.' : ""
revised total of $52,143.75 claimed for attorneys' fees. Amounts
claimed for expert witnesses and miscellaneous fees and expenses
remained the same. _
15. The itemized statement from Ross1 expert Henry R. Friedberg &
Associates reflects 13.5 hours at $45.00 an hour spent on this matter
in 1979, 68 hours at $54.00 an hour in 1980 and 140.5 hours at $54.00
an hour in 1981 for a total of $11,866.50. Mr. Friedberg was one of
two expert witnesses for Ross who appeared at the hearing. This state-
ment also reflects a total of $10,225.50 for analyses of samples. The
-------
regulation (40 CFR 17.07(b)(l)) limits the compensation of expert
witnesses to $24.09 per hour. Application of this rate to total time
expended (222 hours) reduces this aspect of the claim by $6,518.52 to
$5,347.98. This sum added to the total for analyses ($10,225.50)
equals $15,573.48.
16. The itemized statement of Mr. Paul S. Epstein, Ross1 other expert
witness at the hearing, reflects a total of 36 hours expended on the
Ross matter. This time is billed at the rate of $50.00 an hour,
which together with travel and out-of-pocket expenses of $345.00,
comprise the total amount claimed of $2,145.00. Application of the
maximum hourly rate set by the regulation ($24.09) would reduce the
fee claim by $872.76 to $927.24.
17. The application includes a net worth statement reflecting that Ross
has total assets of approximately $3.3 million. Included with the
application is a statement that there were no transfers from, or
obligations incurred by, Ross in the one-year period prior to March 31,
1980, which reduced Ross' net worth below $5,000,000. The appli-
t : . "*'
.cation states that at the time the proceeding giving rise to this
application was instituted, Ross had 50 employees and that at no time
has it had more than 500 employees.
18. Complainant has filed an answer to the application and Ross has filed
a reply to the answer.
Conclusions
1. Ross is the prevailing party and a qualified party to receive an
award under the EAJA (5 U.S.C. 504).
-------
8
2. Complainant was not substantially justified in issuing the complaint
and pursuing the proceeding charging Ross with violations of the
Toxic.Substances Control Act and there are no special circumstances
making an award to Ross unjust.
3. Ross did not engage in conduct which unduly protracted the
proceed ing.!./
4. Save for amounts claimed by experts in excess of the maximum hourly
-rate allowed by 40 CFR 17.07(b)(l), amounts claimed are adequately
documented, are considered to be reasonable and should be allowed.
Discussion
The Act, 5 U.S.C. 504, provides in pertinent part:
"(a)(l) An agency that conducts an adversary
adjudication shall award, to a prevailing party
other than the United States, fees and other
expenses incurred by that party in connection with
that proceeding, unless the adjudicative officer
of the agency finds that the position of the agency
as a party to the proceeding was substantially
justified or that special circumstances make an
award unjust."
The Act became effective on October 1, 1981, and applies to any
adversary adjudication, as defined in section 504(b)(l)(C) of Title 5,
U.S.C., which is pending on, or commenced after, such date. The
proceeding giving rise to this application was commenced on March 31,
1980, and was clearly pending on October 1, 1981. Civil penalty pro-
ceedings under § 16(a) of the Toxic Substances Control Act (15 U.S.C.
3_/ In fact, there is substantial basis for Ross' assertion that
Complainant delayed the hearing and ultimate resolution of this matter
by failing to promptly respond to legitimate discovery requests.
-------
2615(a)) are adjudications required by statute to be conducted in
accordance with 5 U.S.C. 554 and the regulation (40 CFR 17.03(a)(3))
specifically lists such proceedings as within the coverage of the EAJA.
Legislative history of the Act!/ is to the effect that while no
presumption that the agency's position was not substantially justified
arises from the mere fact that the agency lost, the test is essentially
one of reasonableness and the burden of proof in this respect is on the
agency. The rule appears to be that in order to defeat an award to an
otherwise eligible party, the government must show that its action had a
reasonable basis in law and fact. S & H Riggers and Erectors, Inc. v.
OSHA, 672 F.2d 426 (5th Cir. 1982); Enerhaul. Inc. v. NLRB. 710 F.2d 748
(llth Cir. 1983) and Olsen v. Department of Commerce, Census Bureau, 735
F.2d 558 (Fed. Cir. 1984). Some courts, however, while not precisely
articulating the scope of the appropriate standard, have indicated that
4_/ See House Report No. 96-1418, September 26, 1980, at 10, 11; U.S.
Code Congressional and Administrative News (1980) at-4989: "The test of
whether or not a Government action is substantially justified is essentially
one of reasonableness. Where the Government can show that its case had a '
reasonable basis both in law and fact no award will be made. In this regard,
the strong deterrents to contesting Government action require that the
burden of proof rest with the Government. This allocation of the burden,
in fact, reflects a general tendency to place the burden of proof on the
party who has readier access to and knowledge of the facts in question. The
committee believes that it is far easier for the Government, which has
control of the evidence to prove the reasonableness of its action than it
is for a private party to marshal the facts to prove that the Government
was unreasonable ****." "The standard, however, should not be read to raise-
a presumption that the Government position was not substantially justified
simply because it lost the case. Nor, in fact, does the standard require the
-Government to establish that its decision to litigate was based on a sub-
stantial probability of prevailing." Id at 4990.
-------
10
the showing required of the government [to defeat an award] should be
slightly above or more strict than simply reasonableness.!/
Irrespective of the rule to be applied, however, it would seem to be
clear that Complainant's action herein did not have a reasonable basis
in fact and cannot be. regarded as substantially justified. The final
decision establishes that Complainant's evidence showed prima facie that
sample SOI contained PCBs at a concentration of 4.4 ppm, rather than 4400
ppm as charged, and that Complainant's contention that this gap could be
bridged by application of the correct dilution factors to the reported
result was based on mere speculation. Inasmuch as Complainant had the
burden of establishing the violation charged by a preponderance of the
evidence and incineration of PCBs in concentrations below 50 ppm in an
unapproved incinerator was not a violation of the .Act or regulations,
the charge against Ross was dismissed.
Complainant argues that reasonableness in this context means that
the agency must be possessed of facts from which it could reasonably
believe that the .law has been violated and points to the ALJ's finding
.? :
that Ross had not established its contention that tests on sample SOI had
been improperly conducted or calculated (Answer at 11, 18, 19).
Complainant says that another way of stating the test is that the agency's
position is reasonable if the evidence was sufficient to establish a prima
facie case in its favor, unless explained or rebutted.
5/ See Wolverton v. Schweiker, 533 F.Supp. 420 (D.Idaho, 1982);
Spencer v. NLRB, 712 F.2d 539 (D.C. Cir. 1983). This is apparently based
on the fact that the Senate Judiciary Committee considered and rejected
an amendment that would have changed the applicable standard from "sub-
stantially justified" to "reasonably justified," the former being regarded
as the greater burden.
-------
11
While Complainant's description of the applicable standard for
determining whether its action was substantially justified within the.
meaning of the EAJA is almost certainly too lenient,**/ no issue need be
taken therewith in this instance because it is clear that Complainant has
not established a prima facie case of a violation of the PCB rule where
its documentary evidence shows a concentration of incinerated PCBs of
only 4.4 ppm, far below the legal limit of 50 ppm. It is true that the
ALJ, based in part on the fact Ross1 expert, from an examination of the
CRL file, was apparently able to duplicate reported PCB results as to
sample SOI, found that Ross had failed to establish its contention that
the tests were improperly conducted or calculated. The data upon which
the expert's determination was based is not in the record, however, and
the final decision holds as a matter of law that failure to document or
otherwise support the final reported PCB concentration (Compl.ajnant's
laboratory director having acknowledged that good laboratory practice
required such documentation) under the circumstances present here requires
the conclusion that Complainant has not met its burden of proving the
violation charged by-'a preponderance of the evidence.
The result might well be different if Complainant's documentation
bridged the gap between the reported result and the figure shown on the
computer printout and doubts were cast on the validity of the tests by
independent evidence introduced by Ross.Z/ In that instance, it would be
6/ See Sullivan, The Equal Access to Justice Act In the Federal Courts;
84 CoTum. L. Rev. 1089, wherein it is argued that the standard should be
the existence of a genuine controversy in which the government has some
likelihood of prevailing. This would appear to require as a minimum some
evaluation of opposing evidence, which is not true as to the mere ability
to prove a prima facie case.
TJ This appears to be precisely the case with regard to sample S28
collected from the mixing pit on November 5, 1979.
-------
12
apparent that Complainant had made out a prima facie case, which is
not true as to sample SOI herein. Although the final decision does
state (at 19) that the burden of proof therefore shifted back to Complain-
ant to provide evidence of how the so-called dilution factor was used in
the laboratory procedures followed by Complainant's analyst, the mentioned
discrepancy was highlighted through the cross-examination of Complainant's
own witnesses. It is therefore concluded that Complainant failed to make
out a prima facie case as to sample SOI and that its action as to that
sample was not substantially justified even under its own explication of
the applicable standard.^/
Split or partial awards under the Act are clearly appropriate and even
if its action as to sample SOI is deemed substantially justified, its
action as to the other samples cannot be. As Ross points out (Reply to
Complainant's Answer at 8), Complainant had no evidence that the contents
of the 17,000-gallon tank were incinerated between July 10 and October
2, 1979, as charged in the complaint and no evidence as to the disposition
of the wastes present in. the mixing pit on November 5, 1979. Complainant ..
Bf In Ulrich v. Schweiker, 548 F.Supp. 63 (D. Idaho, 1982) the court
reversed the Secretary's decision denying disability benefits under the
Social Security Act. Nevertheless, the application for fees under the EAJA
was denied, the court holding that there was a genuine dispute as to
plaintiff's eligibility, the decision was a "close call" and therefore,
the Secretary's decision was substantially justified. Cf. Wolverton v.
Schweiker (note 5, supra), where Secretary's decision was not supported
by substantial evidence or, according to the court, any evidence, Secretary's"
decision was not substantially justified and an award under the Act was
made. In Cinciarelli v. Reagan, 729 F.2d 80 (D.C. Cir. 1984), the
government settled the underlying litigation after the government's
position on statutory interpretation was rejected on appeal. In subsequent
litigation under the EAJA, the government's position as to interpretation
of the statute, although erroneous, was held to be substantially justified.
Its position on the facts, however, was held not to be substantially
justified, making a partial award appropriate.
-------
13
did not bother to appeal the ALJ's dismissal of the complaint .in these
respects. Accordingly, apart from any questions and the validity of the
tests,.i/ .its action as to these wastes cannot be regarded as
substantially justified.
Complainant's answer to the application includes references to
citizen complaints of odors, haze and respiratory ailments and a copy of
a memorandum, dated November 5, 1979, referring, inter alia,l?_/ to com-
plaints of odors by residents in the area of the Ross facility. Included
as Attachment B to the answer is a petition signed by over 100 residents
of Eaton Township that proper operational controls be imposed on the
facility so that it operated without endangering the petitioners' health.
Ross was permitted to reply to the answer and has filed a motion to
strike the attachments and references thereto in the answer, asserting
that the petition was not in the record of the proceeding and pointing
out that Complainant has not moved for further proceedings in accordance
with 40 CFR 17.25(b). Ross further points out that in the absence of a
motion for further proceedings, any additional facts must be supported
_- :
by affidavit in accordance with 40 CFR 17.22(c), which has not been done
in this instance. Ross alleges that the attachments and references
_9/ Although Complainant is considered to have established a prima
facie case that sample S28, collected from the mixing pit on November 5,
1979, contained PCBs at a concentration .of 67.3 ppm, the CRL file and
computations were reviewed by Ross1 expert, Mr. Paul Epstein, and the ALJ
held that his uncontradicted testimony cast sufficient doubt as to the
validity of the CRL reported result that it could not be held Complainant
had established by a preponderance of the evidence the sample contained
PCBs equal to or in excess of 50 ppm.
10/ It is of interest that the memorandum refers to the conflicting
data BTses arising from the large differences between PCB concentrations
reported by CRL on samples taken on July 10, 1979, and the Ohio EPA on
samples taken on October 2, 1979. The memorandum attributes the differences
to analytical error and/or the fact product sampled in July may have been
incinerated.
-------
14
thereto are irrelevant to the issue at hand and highly prejudicial (Reply
to Answer at 2). Ross says that it was charged with a violation of an
act and regulations addressing the manufacture, use and disposal of PCBs
and that this had nothing to do with water contamination, odors, loss of
vegetation or medical problems. It asserts that no such complaint has
ever been brought against Ross by any state or federal agency.
There being no apparent connection between odors and other complaints
from residents of the area concerning operation of the facility and the
allegations in the complaint, Ross' motion is prima facie well taken.
Although Complainant has not so argued, the only apparent purpose of
including the citizen petition as to the operation of the facility is to
show that special circumstances make an award to Ross unjust.!!/ Because
there is no evidence, other than the alleged improper disposition of PCBs,
that the Ross facility was operated in violation of any federal, state or
local laws or regulations and because any such inquiry would involve extran-
eous matters clearly beyond the scope of the complaint against Ross, any
contention that the citizens' complaints in this instance can be used as a
basis, for finding an award to Ross unjust is rejected. The motion to
strike is granted.!£/
Complainant has objected to a number of items in the application foe.
the reason, among others, the charges were incurred, prior to the issuance
ll/ Absent such a purpose, the petition hinders rather than helps
Complainant's position, because it tends to demonstrate the complaint was
issued without adequate investigation in response to public pressure.
12/ Before the Judicial Officer, Complainant filed a motion for
leave to file a reply to the motion to strike. This motion was denied
without prejudice to Complainant's right to renew the motion before the
ALJ (letter from Judicial Officer, dated July 19, 1984). Complainant
has not renewed the motion.
-------
15
of the complaint and thus are not properly part of a proceeding under
40 CFR 17.03(a)(3). Ross points out that the applicable statutory
language (5 U.S.C. 504(a)(l)) is that the fees and expenses claimed be
"incurred in connection with that proceeding," i.e., the proceeding in
which the applicant was the prevailing party, and alleges that all the
claimed amounts are properly recoverable. Other than the amounts for
expert witnesses in excess of the hourly rate allowed by the regulation,
which are referred to in the findings and hereinafter, Complainant's
objections are considered to be without merit. Specific reasons for
overruling the objections follow:
b. Charges (attorneys' fees) for telephone calls, research, review,
discussions, etc., on November 5 and 6, 1979, January 3, 15, 16, 17
and 28, February 8 and 26, and March 6 and 16, 1980.
Ross says that these services were performed in anticipation
of the proceeding, were therefore in connection with the pro-
ceeding and are properly recoverable.
Ross was clearly entitled to legal representation in its
efforts to head-off or avoid the filing of a complaint and to be
prepared and informed when, and if, a complaint was filed. Ross1
contention that these services were in connection with the proceeding
and are therefore recoverable is accepted. Questionable, however, is
that portion of the hour of services charged on January 3, 1980, which
represents a call from Mr.Triedberg concerning a stack test. Prima
facie, this concerns the Clean Air Act rather than the TSCA. Con-
ceivably, however, it could relate to tests as to the qualification of
-------
16
Ross' incinerator to burn PCBs and inasmuch as the charge is not
otherwise broken down, the charge is accepted-13/
c. Complainant objects to 15 minutes charged on April 7, 1980, for a call
to a Pat O'Connor concerning Federal EPA matters.
Ross explains that Mr. O'Connor was and is Ross' accountant and
that it is necessary that he be fully informed as to suits against the
firm. This explanation is accepted and the charge is allowed:
d. -Complainant also objects to a total of over 5.5 hours charged on
June 3 and 5, 1980, concerning television and newspaper coverage of
the proceeding against Ross.
Ross explains that there was a barrage of unfavorable publicity
concerning the complaint against Ross, that Mr. Ross, President of
the applicant at the time, was interviewed, by representatives of the
news media and that Mr. Ross made the decision to appear on a TV
news broadcast in order to explain his company's position to the public.
Because adverse publicity could, and allegedly did, have an unfavorable
impact on Ross' business,!!/ "its contention that these services were_.
in connection with the proceeding is accepted. These charges are
allowed.
13/ The purpose of the EAJA is to encourage contests of unreasonable
or un3ustified government actions and this purpose would not be served by
a crabbed or narrow interpretation of allowable fees and expenses under
the Act.
14/ Although not part of the record, it is of interest that a letter
from counsel for Ross to the ALJ, dated October 1, 1980, refers to a press
release concerning the case issued by EPA at the time the complaint was
issued and to statements made by counsel for Complainant at a meeting of
concerned area residents. Complainant, then, appears to have been largely
responsible for the publicity concerning the proceeding and its present
objection to expenses incurred by Ross in an effort to counter an
unfavorable publicity barrage comes with an ill grace.
-------
17
e,f. Complainant objects to one-half hour charged for a call concerning
hazardous waste from EPA on July 16, 1980, and to 15 minutes charged
on October 6, 1980, concerning a U.S. EPA Task Force.
Ross points out that it operates a hazardous waste incineration
facility and alleges that both calls related to the proceeding against
Ross. This explanation is accepted and these charges are allowed.
g. Complainant objects to charges on July 22, October 17, 20 and 28,
1980, concerning Freedom of Information Act requests and an appeal
from an apparent denial of such a request. Complainant says that
these charges are not properly part of the proceeding and therefore
unallowable (Answer at 5).
Ross asserts that these charges were in connection with the
proceeding, because they were necessitated by Complainant's ignoring
its attempts to make discovery and thus obtain information essential
for its defense. As indicated (note 3, supra), the record supports
Ross in this respect and these charges are allowed.
h. Complainant objects to charges shown on November 13, 1980, which
"include preparation of RCRA plans and two calls to Mrs. Cromling,
1 Executive Vice President of Ross, concerning these plans.
Ross alleges that preparation of the RCRA plans involved an
analysis of this proceeding's impact on such plans and that there-
fore the fees for such time are allowable. Although the matter..is
not free from doubt, this explanation is accepted.
j,k.
l,m
& n. Complainant objects to time charged on October 15, 1981, for a call
to the ALJ as to whether a transcript of the hearing had been filed,
-------
18
for a call on January 4, 1982, to the ALJ relative to an extension
of time to file a brief, for calls to the Judicial Officer on March 2,
1982,.relative to an extension to file an appeal and a brief in
support thereof, for a call on April 13, 1982, relative to an extension
of time to file pleadings and for charges in the total amount of
$148.65 for express mail.
These charges were all incurred in connection with the proceeding,
are normal and expected happenings in present day litigation and are
clearly allowable.
Complainant objects to time (3.5 hours) charged on December 30, 1981,
which includes research of the Equal Access to Justice Act upon the
ground this time was not properly part of the proceeding.
Ross1 answer to this argument is less than satisfactory, merely
stating that research regarding the EAJA was included, because the
Act was mentioned in its brief. It is concluded, however, that this
time is properly chargeable, because it has been held that under the
EAJA applicable to judicial proceedings (28 U.S.C. 2412) expenses
incurred in bringing a successful EAJA suit are recoverable.
Cinciarelli v. Reagan, (note 8, supra). The language allowing
recovery of attorney's fees in judicial proceedings tracks that
allowing such recovery i.n administrative proceedings and no reason is
apparent why a similar rule should not apply to the latter proceedings..
-------
19
Regarding its claim for expert witness fees, which as noted previously,
were computed at rates in excess of that allowed by the regulation, Ross
points out.that the Act (§ 504(b)(1)(A)) provides that recoverable "fees
and expenses" includes reasonable expenses of expert witnesses and that
the amount of fees is to be based upon prevailing market rates for the
kind and quality of services furnished. Ross argues that the hourly rate
charged by Messrs. Epstein ($50.00) and Friedberg ($54.00) is nearly the
same-and constitutes strong evidence that the prevailing market rate for
such services is approximately $50.00 an hour. Recognizing that the Act
further provides that no expert witness may be compensated at a rate in
excess of the highest rate paid by the involved agency for expert
witnesses, Ross attacks the $24.09 hourly rate set by the regulation as
unreasonable and contrary to law. Regardless of the merits of this
argument, the ALJ may .not ignore or invalidate the regulation and is
bound thereby.
Ross' application is otherwise in conformity with the Act and
regulation.Jjj/ .
15/ In a letter to counsel, dated August 2, 1984, the ALJ inquired
whether Ross presently desired a hearing and pointed out that the
application did not include the statement required by 40 CFR 17.13(b)(l)
as to the hourly rate billed and paid by the majority of counsel's clients
during the relevant time period. The omitted statement was supplied by
a letter from counsel, dated August 14, 1984, wherein it was alleged that
the rate of $75.00 per hour specified on page 22 of the amended appli-
cation and incorporated by reference in its affidavit was considered to
comply with the cited requirement.
-------
20
Conclusion
It is recommended that Ross1 application for fees and expenses under
the Equal Access to Justice Act (5 U.S.C. 504) be allowed in the amount
of $71, 243. 17. li/
Dated this
13
day of September 1984.
T. Nissen
Administrative Law Judge
16/ This sum is derived by deducting the amount claimed for expert
witne?? fees above the amount allowed by the regulation ($7,391.28) from
the total claim of $78,634.45. If Complainant's position as to the
propriety of the sampling and testing of sample SOI be regarded as
substantially justified, it is concluded that one-half of the recommended
total claim should be allowed.
-------
36
-------
UNITED STATES ENVIRONMENTAL PROTECTION Af,ENCY 'w ' '.
i ' -
BEFORE THE ADMINISTRATOR . *'
*/
In the fitter of ) ' J"
Petroleum and Power Maintenance ) Docket No. TSCA V-C-189
(PPM). Inc., )
)
Respondent )
Toxic Substances Control Act - Rules of Practice - Default Orders
Where Respondent failed to supply information directed to be furnished
by the ALJ in a prehearing exchange and failed to respond to an order to
show cause why a default order should not be entered, Respondent was in
default pursuant to 40 CFR 22.17(a), Complainant's prehearing exchange
was sufficient to make a prima facie case in its favor, and an order was
entered finding violations of Act and assessing full amount of penalty
proposed in complaint.
Appearance for Complainant: Lisa S. Seglin
Assistant Regional Counsel
EPA, Region V
Chicago, Illinois
Appearance for Respondent: Larry A. Ring
President
Petroleum and Power Maintenance (PPM),
Inc.
Canton, Ohio
Default Order
This is a proceeding under § 16(a) of the Toxic Substance Control
Act (TSCA), 15 U.S.C. 2615(a), instituted by a complaint filed by the
Director of the Waste Management Division, Region V, United States
Environmental Protection Agency, against Respondent, Petroleum and
-------
Power Maintenance, Inc. (PPM), on January 18, 1934. PPM filed an answer
to the complaint and request for hearing on April 6, 1984. The natter
was referred to the ALJ by order of designation on April 24, 1984. By
letter, dated Kay 7, 1984, the ALJ directed counsel for Complainant to
file a statement regarding settlement by June 15, 1984, and an exchange ..
of prehearing information by both parties on or before June 29, 1984, if
the case was not settled. On June 15, 1984, counsel for Complainant
filed a statement reflecting that the parties had not reached an agreement
to settle the matter.
As part of the prehearing exchange, the parties were required to
submit a list of witnesses intended to be called at the hearing with a
brief narrative summary of their expected testimony and copies of all
documents and exhibits intended to be introduced into evidence.
Additionally, .the Complainant was required to submit summary evidence
supporting its allegations and PPM was required to explain its denial of
Complainant's allegations. The Complainant fully complied with this
directive on June '29, 1984, but PPM made no response.
- On July 24, 1984, the ALJ issued an order directing PPM to show cause
on or before August 17, 1984, why a default order should not be entered
for PPM's failure to comply with the ALJ's directive. PPM~did not repTy to
the order to show cause.i/ On August 21, 1984, the Complainant filed a
I/ The order was sent certified mail, return receipt requested, but
was returned as unclaimed on August 21, 1984. A copy of the order was then
mailed to Respondent by regular mail on August 2.1, 1984. The envelope
containing the order has not been returned and is presumed to have been
received by PPM.
-------
motion for default judgment, which was served upon the PPM by certified
mail.2/ The documents and exhibits submitted by Complainant on June 29,
1984, establish a prima facie case against the Respondent, that is, that
PPM has violated Federal regulations regarding recordkeeping and storage
required for polychlorinated biphenyls (PCBs) set forth in 40 CFR Part 761,
promulgated under § 6 of TSCA, thereby violating § 15 of TSCA, 15 U.S.C.
2614. Said documents and exhibits are incorporated into and made .a part
of the record of this proceeding.
By reason, of the foregoing, Respondent is found to be in default
pursuant to the Consolidated Rules of Practice Governing the Administrative
Assessment of Civil Penalties and the Revocation or Suspension of Permits,
40 CFR 22.17. Such default constitutes an admission of all facts alleged
in the complaint and a waiver of hearing by Respondent as to such factual
allegations.
Findings of Fact
1. The Respondent, PPM, is a Delaware corporation, which has a place
.of business in Louisville, Ohio.
2. On February 25, 1983, a representative of U.S. EPA conducted an
inspection of Respondent's Louisville, Ohio facility.
3. At the time of inspection, PPM maintained a PCB storage area on the
east end of the feed mill.
2/ In a telecon on September 12, 1984, counsel for Complainant stated
the motion had been returned unclaimed on September 11, 1984 and that the
secretary to PPM's president had stated the firm had filed for bankruptcy
and was no longer accepting mail. It is concluded that the motion and the
order to show cause have been available to PPM for more than the 20-day
period specified by 40 CFR 22.17(a).
-------
4. The regulation, 40 CFR 761.6S(b), requires that areas used for
storage of PCBs and PCB items designated for disposal have an
adequate roof and walls, impervious floor, continuous 6-inch-high
curbing, and meet the minimum containment volume requirements.
5. At the time of inspection, PPM had stored numerous drums of PCB
liquids, PCB solids, and empty PCB-contaminated drums in an area
which did not have an impervious floor and continuous curbing.
6. 40 CFR 761.65(c)(5) requires all PCB articles and PCB containers
in storage be checked for leaks at least once every 30 days.
7. Respondent's drums of PCB liquids, PCB solids, and PCB-contaminated
drums are "PCB Containers" and "PCB Items" within the meaning of
40 CFR 761.3(v) and (x).
8. At the time of inspection, PPM had not conducted monthly inspections
for leaks in the storage area.
9. 40 CFR 761.65(c)(8) requires that PCB articles and PCB containers
shall be dated when they are placed ~in storage.
10. At the time of inspection, PPM's PCB containers, located in the PCB
.storage area, were not dated as to when they were placed in storage.
11. 40 CFR 761.180(b) requires that each owner or operator of a facility
used for the storage or disposal of PCBs and PCB items prepare and
maintain a document which includes: the date when any PCBs and PCB
items were received by the facility during the previous calendar year
for storage or disposal; the date when any PCBs and PCB items were
disposed of at the disposal facility or transferred to another disposal
or storage facility; a summary of the total weight in kilograms of
.PCBs and PCB articles in containers and the total weight of PCBs
-------
contained in PCB transformers that have been received, transferred,
or retained at the facility during the previous calendar year.
12. At the time of inspection, there were 78 55-gallon drums containing
PCB liquids, PCB solids, and empty PCB-contaminated drums located in
Respondent's storage area.
13. At the time of inspection, PPM had records for only 56 55-gallon drums
located in storage.
Conclusions
By reason of the facts set forth in the findings above, PPM failed
to comply with Federal regulations governing PCBs as follows: Respondent
failed to properly store, inspect and date PCB containers in violation
of § 15 TSCA, 15 U.S.C. 2614, and 40 CFR 761.65(b), (c)(5) and (c)8;
Respondent failed to prepare and to maintain complete annual PCB documents
in violation of § 15 of TSCA, 15 U.S.C. 2614, and 40 CFR 761.180(b).
Pursuant to 40 CFR 22.17, the penalty proposed to be assessed in
the complaint, $20,000, shall become due and payable by Respondent, PPM,
without further proceedings upon the issuance of this default order.
Order
Pursuant to § 16(a) of TSCA, 15 U.S.C. 2615(a), a civil penalty of
$20,000 is hereby assessed against Respondent, PPM, for violations of
the Act found herein.
-------
Payment of the full amount of the civil penalty assessed shall be nade
within sixty (60) days of the service of the final order upon Respondent,
PPM, by forwarding to the Regional Hearing Clerk a cashier's check or
certified check payable to the United States of America.I/
Dated this
nf
/y .
day of September 1984.
Spencer- T. Nissen
Administrative Law Judge
3/ Pursuant to 40 CFR 22.17(b), this default order constitutes an
initial decision, which shall become final unless appealed in accordance
with 40 CFR 22.30 or unless the Administrator elects, sua sponte, to
review the same as therein provided.
-------
-------
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGKNCY
WASHINGTON, D.C.
-»»"
In the Matter of: )
)
)
THE DOW CHEMICAL COMPANY, ) Docket No. TSCA (16(a))
)
)
Appellant )
FINAL ORDER
Pursuant to terms of an undated stipulation (copy
attached) by the Dow Chemical Company (Respondent), and
the U.S. Environmental Protection Agency (Complainant), the
Rulings issued in this case on September 28, 1981, by Admin-
istrative Law Judge Perlman, on July 28 and August 17, 1982,
by Judicial Officer McCallum, and the order and opinion on
October 4, 1982, by Administrative Law Judge Harwood are
hereby vacated.and those Rowings and that Order and Opinion
shall have no precedential value. The vacation of those mat-
ters shall not, however, preclude EPA, after considering the
--issues anew, from reaching the same conclusions, as contained
in those rulings and order and opinion, in other cases.
It is ordered that Respondent is hereby assessed a civil
penalty of $120,000 pursuant to Section 16 of the Toxic Sub-
stances Control Act in full settlement of the claims contained
In the complaint filed in this case. Payment of the full
-------
-2-
amount of the civil penalty shall be made within 25 days
from the- issuance of this final order by sending a certi-
fied or cashier's check, payable to the Treasurer of the
United States of America, to the Hearing Clerk (A-110),
EPA, 401 M Street, S.W. (Room 3706), Washington, D.C. 20460
Ronald L. McCallum
Chief Judicial Officer (A-101)
Dated: SEP-2 4 1984
-------
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
THE DOW CHEMICAL COMPANY, )
Appellant - Petitioner,
) No. 80-1498 and
WILLIAM RUCKELSHAUS, Adninistrator ) 82-3536
U.S. ' Environmental Protection Agency, S (Consolidated Cases)
et al.. - )
Appellees - Respondents. )
STIPULATION
The Dow Chemical Company (Dow), Appellant, in No.
80-1498 and petitioner in No. 82-3536, and Williem Ruckelehaus,
Administrator, U.S. Environmental Protection Agency (EPA) and'
"VA, appellees in No. 80-1498 and respondents in 82-3536, are
the parties to the above-captioned case.
In the above-captioned cases, the Dow Chemical Cocpany
is seeking judicial review of decisions of the U.S. Environmental
Protection Agency, which have resulted in imposition of a civil"
penalty of §120,000 for violation of regulations covering
polychlorinated biphenyls (PCBs) issued ur.der section 6(e) of
the Toxic Substances Control Act (TSCA), 15 U.S.C. §2605(e).
At issue are certain activities of Dow between July 1, 1978,
and August 1, 1979, involving heat transfer fluid containing
rocnochlorinared biphenyl (MCB). Section 6(e) of TSCA regulates
(PCBs). A principal issue in these cases is whether MCB is a
PCS within the meaning of section 6(e).
-------
- 2 -
EPA, in accordance with Orders issued by the United
States Court of Appeals for-the District of Columbia Circuit
in Environmental Defense Fund v. Environmental Protection
Agency. (Ko. 79-1580)., is to propose and take final action upon
anendaents to the PCB regulations (40 C.F.R. 761) » As part of the
proceedings to develop attended PCB rules, on April 15, 1983, the
Environmental Defense.Fund (EDF)> the Natural Resources Defense
Council" (HRDC) and the Chenical Manufacturers Association (CMA)
jointly submitted a proposal for amendment of the PCB rule.
The EDF-NRDC-CMA proposal would, among other things, require
manufacturers to assure that the concentration of inadvertently
generated PCBs averages below 25 parts per million (ppm) per"
year and is at all times below 50 ppm. The proposal_ would
treat MCB as a" PCB. Hov/ever, the proposal applies a discount:
factor of 50 to MCB* because, the proposal recognizes a lower
level of environmental persistence and accumulation" of MCB as
compared with the higher chlorinated biphenyls. (The aspects
of the proposal Described in this paragraph are hereinafter
referred to as the "HCB regulatory level and discount factor").
EPA has already stated that the EDF-NRDC-C71A proposal
"provides a satisfactory framework for the ongoing uncontrolled
PCB ruleisaking" and that "substantial portions or even possibly
all of the proposal way be incorporated into its proposed 'rule
for uncontrolled PCBs.11 Report to the Court, Affidavit of Don* R.
Clay, Environmental Defense Fund, Inc., ec al. v. Environmental
Protection Agency. (D.C. Cir. No. 79-1580). filed June 27, 1983.
-------
- 3 -
Regulation along the lines of the EDF-^?.DC-CMA
^roposal, including an MCB regulatory level and discount factor
as described above, would substantially resolve Dow's practical
problems. Accordingly, if such a regulation were to be issued
by EPA, Dou is willing-to withdraw the present litigation.
Dew and EPA agree that it would be inappropriate and
wasteful to continue to litigate these cases.since EPA cay
an;end the PCB rules in the manner described above. Accordingly,
Dew and EPA, intending to be bound hereby stipulate and agree
as follows:
1. If EPA promulgates auier.dcents to the PCB regu-
lations to provide in substance the MCB regulatory level and
discount factor described above, then:
a. Neither Dow nor any of its subsidiaries _will seek
judicial review, or review in an administrative proceeding under
section 16(a), TSCA, -15 U.S.C. 2615(a), of the amended PCB
regulations insofar as they provide such requirements for MCBs;
b. Within 30 days from the date of Federal "Register
publication of such anended PCB regulations, Dow and EPA will
file a joint irotion to dismiss Dow's appeal in No. 80-1498,
and co retcand No. 82-3536 to EPA, each party bearing its own
costs; and, upon recand of No. 82-3536 to EPA":
A. The Initial Decision and Final Order of EPA
Administrative Law Judge Harwood, October 4, 1982, together"
-------
- 4 -
Ith the ruling of EPA Chief Adninistrative Law Judge Perlaan of
bepteniber 22, 1980, and EPA Judicial Officer McCalluni's rul'ings
of July 28, 1982 and August 17, 1982, shall be vacated. Thac
Decision end Order and these rulings shall be deemed to have no
collateral estoppel or'precedential value, provided that EPA
is not thereby precluded, after considering anew the issues
involved, from rendering a decision in other cases that has the
same conclusions; and
B. In lieu of these vacated rulings, EPA will issue
a final administrative order, consenred to by Dow, in Docket
No. TSCA (16(a)-(!)), as set forth in Exhibit A hereto; and.
C. Within 25 days from issuance of the final order
described above, Dow will, pay to EPA the civil penalty of $120,000
.
.rovided for in Exhibit A, by tendering a certified or cashier's
check payable to the -Treasurer, United States of America In
that amount. The check shall 'be sent to the Headquarters
Hearing Clerk (A-110) , EPA, 40* M Street, S.W. (Room 3706),
Washington, D.C. 20460.
2. The--cooperative program [described in the
September 27, 1979, letter from Richard D. Wilson, Deputy
Assistant Administrator for General Enforceinent. to Paul F.
Orerfice, President and Chief Executive Officer of Dow Chemical
Company, and the November 26, -1979, draft of the letter which
Dow was to .send to its customers who purchased Dowtherm G fluid]
("cooperative program") is modified as follows:
-------
- 5 -
a. the following deadlines shall apply to Dow's
customers for compliance with the limits for i'JCBs in their heat
transfer systems:
i. If the final amended ?CB regulation described
^
in paragraph 1, above/ specifies the MCB regulatory level and
discount factor described in paragraph 1., then the date for
compliance with the 11CB levels in the final amended regulation
shall be. the "effective date of the said regulation.
ii. If the final amended PCB regulation described
in paragraph 1, above, specifies any HCB level less than that
described therein, then Dow's custoaere will have 12 months
following the effective date of the final - amended regulation -
^.o reduce the MCB levels in their heat transfer systems to
ccnply with the.final amended regulation.
b. To qualify for this modification to the cooperative
program, any Dow custocer EUSZ: have both received the Dovtherm
G fluid containing'MC3B prior to September 27, 1979, and
«
participated in the cooperative prograra previously.
c. This Stipulation will only modify the July 1,
1984, deadline in the existing-cooperative program for Dow's
customers to reduce the level of MCBs to 50 ppm in their heat
transfer systems.-. All other provisions of the cooperative program
remain in effect until promulgation of the amended PCB regulations
described in paragraph 1 above. At that time, to the extent
chat the cooperative, progreci regains in effect pursuant to
-------
- 6 -
ub-paragraph (a)(ii) above, it shall be governed by the
*
provisions of such amended regulation. Any Dowtherm G obtained
after September 27, 1979, is not subject to this Agreement.
3. If EPA fornally proposes or promulgates etoend-
oents to the PCB regulations which provide requirements for
MCBs -that are more stringent than the HCS regulatory level end
discount factor described in paragraph 1, above, then EPA.and
Dow will jointly request the Court to promptly reschedule
submission of Nos. 80-1498 and 82-3536, and Dow reserves the
right to seek judicial review of EPA's final action on the
amended PCB regulations.
4. Nothing in this Agreement shall operate to waive
.any legal right of Dow or. EPA unless such a waiver is expressly
rovided in the Agreement. Dow has not waived the right to file
comments in the cur-r-ent PCB rulezuaking proceeding on any issue,
including ccznuente challenging the inclusion of MCBs as PCBs
in the event that EPA promulgates amended PCB rvles which do
.» :
not provide the MCB re'gulatory level and discount factor described
above. In addition, if the amended PCB regulation described
in paragraph 1 is remanded on judicial review, Dow has not
waived any rights to assert any available contention in the
.remand proceedings and in further judicial proceedings arising
out of the remand proceedings, - including the contention that
MCBs are no.t PCBs.
5. This Agreement will be deemed to be executed
.id shall becone .effective when it has been signed by the
representatives of the parties set forth below.
Respectfully submitted.
-------
- 7 -
ROBERT V. ZENER
Pepper, Hamilton
Scheetz
1777 F Street, N.
Washington, D.C.
(202) 842-8112
a
'and
W.
20006-5279
DAVID T. BUESflfE, Atftomey
U.S. Departtae'nt of Justice
Environmental^) Defense Section
Land and Natural Resources Division
Benjamin Franklin Station
Pest Office Box 7415
Washington, D.C. 20044-7415
(202) 633-4426/2281
(I _
emic
GRAY _
The Dow Chemical Co.
1030 Dow Center
rJidland. Michigan 48640
(517) 636-0933 '
RUTH. G.-BELL, Assistant Gen'eral Counse
ALAN H. CARPI El?
ELLEN R.'-SPITALNIK. ,Attorneys
United States Environmental
Protection Agency
401 M Street S.W.
Washington, D.C. 20460
(202) 382-7213
Counsel for Dow
'Counsel for the Adninistrator,
EPA and EPA
-------
CERTIFICATE OF SERVICE
I certify that copies of the foregoing Final Order in
the matter of: THE DOW CHEMICAL COMPANY/ Docket No. TSCA _( 1 6 ( a ) ) ,
were either mailed or hand delivered to the following persons:
By 1st class mail,
postage prepaid:
By hand delivery:
John A. Gray, Esq.
The Dow Chemical Company
2030 Willard H. Dow Center
Midland, MI 48640
Alan H. Carpien, Esq.
U.S. EPA Headquarters
Office of General Counsel
401 M Street, S.W.
Washington, DC 20044
(LE-132P)
Mr. Terrell Hunt
Acting Associate Enforcement Coun-
sel f/Special Litigation (LE-134P)
U.S. EPA Headquarters
401 M Street, S.W.
Washington, DC 20044
Ms. Bessie Hammiel
Hearing Clerk
Office of Administrative
Judges (A-110)
U.S. EPA Headquarters
401 M Street, S.W.
Washington, DC 20044
Law
M. Gail Wingo
Secretary to the Chief
Judicial Officer
Dated: SEP 2 4 1984
-------
38
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE REGIONAL ADMI N1STRATOR: r,-
u -:«- - o
IN RE: )
)
Carolina Transformer Co., ) TSCA IV-84-0002
Inc. ' )
)
Respondent )
DEFAULT ORDER
Preliminary Statement
This is a proceeding under Section 16(a) 'of the Toxic
Substances Control Act (15-U.S.C. §2601 et. seq.), instituted
by a Complaint filed by the Director, Air and Waste Management
Division, Region IV. United States Environmental Protection
Agency, which was served upon Respondent, March 7, 1984.
The Respondent filed an Answer dated March 26, 1984. The
matter was referred to the undersigned by Order dated April
24, 1984. A pre-hearing letter was issued on May 7, 1984
requiring the parties to submit certain information by June
12, 1984 with replies due on June 26, 1984.
i
A Motion for Extension of Time was filed By the Complainant
in order that Respondent could forward financial data, which
might impact prospects for settlement. This motion was
granted on May 31, 1984, and a final filing date of July 12,
1984 was ordered with replies to be filed no later than July
26, 1984. On June 20, 1984, Counsel for Respondent waived
the right to a hearing in this matter and Complainant filed a
-------
-2-
Status Report on June 29, 1984, stating that Respondent's counsel
had further advised that Respondent does not intend to file
prehearing papers and would "stand on its Answer alone." July 10,
1984, Complainant then filed a Motion for Stay of the Prehearing
Exchange, scheduled to be filed July 12, in that Complainant
anticipated filing a Motion for an Accelerated Decision in the
near future. The stay was granted on July 11, 1984." Complainant
then filed, on July 13, 1984, a Motion to Amend the Complaint
reducing the proposed penalty by $4,000 and requesting that
Respondent's original Answer be applied to the Complaint.
(Complainant's Errata Sheet was filed July 16, 1984, correcting
page 3 of the First Amended Complaint.) Such Motion was granted
on July 16, 1984. Complainant's Motion for an Accelerated Decision
with supporting exhibits was filed August 7, 1984 and received
by Respondent on August 9, 1984. Respondent has made no reply to
the Motion for an Accelerated^ Decision. Rather than rule on this
Motion, I chose to treat it as a Motion for Default Judgment in
that Respondents! s notice of July 21, 1984 constitutes an antici-
patory breach of my prehearing order and, indeed, no^correspondence
or documents of any kind have been filed by Respondent since the
June 21, 1984 notice of waiver of right to an administrative
hearing.
All of the above documents are hereby incorporated into and
made a part of the record in this proceeding.
-------
-3-
By reason of the foregoing, the Respondent is hereby found
to be in default pursuant to the Consolidated Rules of Practice
as issued under the Act (40 C.F.R. §22.17). Such default
constitutes an admission of all facts alleged in the complaint
and a waiver of hearing by Respondent. (Respondent also filed
a waiver of its right to a hearing on June 29, 1984.)
Findings of Fact
1. Respondent is a corporation doing business in the State
of North Carolina.
2. Respondent is included in the term "Person" as defined
in 40 C.F.R. §761.3(aa) and as such is subject to the Toxic
Substances Control Act (TSCA), 15 U.S.C. §2601 e_t seq. and the
regulations promulgated thereunder, 40 C.F.R. Part 761 (July 1,
1983).
3. On or about April 26-27, 1983, an inspection of Respondent's
facility was performend by an, authorized employee of EPA pursuant
to Section 11 of TSCA.
4. At the time" of the aforementioned inspection, Respondent
collected waste oils from transformers and stored them in a bulk
storage tank. The storage tank contained approximately 1500
gallons of liquid of which 2 ounces were obtained as a sample.
The sample, identified as TS.235114, revealed upon analysis 72 ppm
PCBs.
-------
-4-
5. The storage tank which was unmarked is a PCb container
as defined at 40 C.F.K. fc7bi.3(v) and 40 C.F.R. S7bl.l(b)
Respondent violated 40 C.F.R. $761.40 (a) (1) by failing to
mark the PCB container.
6. There was no secondary containment surrounding the
storage tank as described in 40 C.F.R. §ii2.7(c)(l) and 40
C.F.R. §112.7(e)(2). Respondent violated 40 C.F.K. S»761.65(c) (7) (ii)
by improperly storing PCBs.
7. A drained 250 gallon capacity Westinghouse transformer,
serial number 6356153, was stored at the 1-95 and Middle Road
facility. A sample of residual oil was collected ana identified
as TS235118. The sample revealed upon analysis t>0 ppm PCBs. A
9 gallon capacity Allis Chalmers ACP transformer, serial number
29992349, was also stored at the 1-95 and Middle Road facility.
A sample of oil was collected and identified as TS235115. The
sample revealed upon analysts 62 ppm PCBs. The-two transformers
are PCB Articles, as defined at-40-C.F.R. §761.3(t). Respondent
violated 40 C.F-.R. §761.80(a) by failing to maintain records on
the PCB container and PCB articles.
Conclusions
By reason of the facts set forth in the above, the Respondent
failed to (1) properly mark .a PCB container, as required by 40
C.F.R. §761.40(a)(1); (2) tailed to properly store PCBs as
required by 40 C.F.R. §761.05(c)(7)(ii); and (3) failed to
-------
-5-
maintain records on the PCB articles and PCB container as
required by 40 C.F.R. 761.80(a). These are violations of
Section 6(e) of TSCA [15 U.S.C. §2605(e)).
Pursuant to Section 22.17 of the Consolidated Rules of
Practice, the penalty proposed to be assessed in the First
Amended Complaint, $26,000.00, shall become due and payable
by Respondent, Carolina Transformer Co., Inc., without further
proceedings.
ORDER
Pursuant to Section 14(a) of the Federal Insecticide,
Fungicide and Rodenticide Act, as amended, a civil penalty of
$26,000.00 is hereby assessed against Respondent, Carolina
Transformer Co. , Inc. for violations of the Act found herein.
Payment of the full amount of the civil penalty assessed
shall be made within sixty (60) days of the service of the .
-------
-fa-
final order upon Respondent, Carolina Transtormer Co., Inc.,
by forwarding to the Regional Hearing Clerk a casnier's check
or certified check payable to the United States of America in
such amount.I/
TnornSs '&. Yost /
Administrative/Law Judge
Dated:
- " I/. See Sec. 22.17 of the Consolidated Rules of Practice
with respect to effect and consequences of. this Deraul-tr Order.
-------
-5-
maintain records on the PCB articles and PCB container as
required by 40 C.F.R. 761.80(a). These are violations of
Section 6(e) of TSCA [15 U.S.C. §2605(e)].
Pursuant to Section 22.17 of the Consolidated Rules of
Practice, the penalty proposed to be assessed in the First
Amended Complaint, $26,000.00, shall become due and payable
by Respondent, Carolina Transformer Co., Inc., without further
proceedings.
ORDER
Pursuant to Section 16(a) of the Toxic Substances Control
Act, a civil penalty, of $26,000.00 is hereby assessed against
Respondent, Carolina Transformer Co., Inc. for violations of
the Act found herein.
Payment of the full amount of the civil penalty assessed
shall be made within sixty (60) days of the service of the
-------
'
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REG ION IV
ATLANTA. GEORGIA 3O36S
"Sandra A. Beck
Regional Hearing Clerk
DATED: September 20, 1984
Service of this Errata accornplished in the same manner as the
Certification of Service (copy attached) dated this 20th day.of
September 1984.
IN RE )
) TSCA-IV-84-0002 "/>
CAROLINA TRANSFORMER CO.-, INC. ) Co
) ERRATA TO DEFAULT ORDER ^ ^o \
Respondent ) »
-O:
Enclosed is a corrected copy of Page 5 of the Default Order
issued on September 19, 1984 for the above-captioned case. It is
requested that this corrected page be inserted into the Default
Order and that the original Page 5 be discarded.
-------
I-:LD si .xi i.s rrs'VJ^orsMCNTAL r-Roif ciio
WASHINGTON. D C. 2CJ60
OF net or
Me AOMINIVt
IN RE )
) TSCA-IV-84-0002
CAROLINA TRANSFORMER CO. , INC. )
) ORDER
Respondent )
CERTIFICATION OF SERVICE
In accordance with 40 C.F.R. §§ 22.17(b) and 22.27, I hereby certify
that the original of the foregoing Default Order issued by Honorable
Thomas B. Yost, along with the entire file of this proceeding was served
on the Hearing Clerk (A-110) , U.S. Environmental Protection Agency,
401 M Street, S.W. , Washington, D.C. 20460, by certified mail return
receipt requested; that a true and correct copy was hand-delivered to
counsel for Complainant, Donna hlatthews Post, Office of Regional Counsel,
U.S. Environmental Protection Agency, 345 Courtland Street, Atlanta,
Georgia 30365; and that a true and correct copy was served on counsel
for Respondent, Ronald E. Winfrey, and Stephen J. O'Connor, Rose, Rand,
Ray, Winfrey's Gregory, 214 Mason Street, Post Office Box 1239, Fayetteville,
North Carolina 28302-1239, by certified mail return receipt requested.
In no appeals are made within 20 days after service of this order,
and the Administrator does not elect to review it, then 45 days after-
receipt this will become the Final Decision of the Agency (40 CFR
§§ 22. 27 (c) and 22.30).
Dated in Atlanta, Georgia this 20th day of September 1984. -
-Sandra A. Beck /
Regional Hearing Clerk
------- |